1 


COLUMBIA  LIBRARIES  OFFSITE 

AVERY  FINE  ARTS  RESTRICTED 


SENATE.  (  Ex.  Doc. 

AR01413317  |  \  No.  123. 


LETTER 


FROM 


HJ 


THE  SECRETARY  OF  THE  TREASURY, 


TRANSMITTING, 


In  response  to  Senate  resolution  of  February  14,  1889.  copies  of  testimony 
relative  to  fraud's  in  New  York  custom-house. 


February  20, 1889.— Referred  to  the  Select  Committee  to  Examine  the  Condition  of  the 

Civil  Service  and  ordered  to  he  printed. 


Treasury  Department, 

February  19,  1889. 

Sir  :  In  compliance  with  the  resolution  elated  the  14th  instant,  wherein 
I  was  directed  to  furnish  to  the  Senate  copies  of  all  the  sworn  testimony 
in  regard  to  alleged  frauds  and  undervaluations  in  the  New  York  cus- 
tom-house, taken  by  Special  Agent  Byrne,  and  submitted  with  his  re- 
port dated  November  1,  1887,  I  have  the  honor  to  transmit  herewith 
copies  of  the  papers  referred  to. 
Respectfully,  yours, 

Httoh  S.  Thompson, 

Acting  Secretary. 

Hon.  John  J.  Ingalls, 

President  of  the  Senate  pro  tempore. 


EXHIBITS. 
Exhibit  99. 

Thomas  S.  Tice,  assistant  appraiser,  8th  division,  heing  duly  sworn,  makes  the  fol- 
lowing statement: 

I  have  been  assistant  appraiser  of  the  8th  division,  relating  to  sugars,  since  March  8, 
1887.  As  a  part  of  my  presumed  duties  I,  upon  one  occasion  near  the  end  of  the  month 
of  March,  detailed,  or  rather  changed,  the  places  of  three  sugar  samplers,  who  had 
already  been  assigned  to  certain  districts  by  Mr.  Bowne,  an  examiner  under  me,  to 
other  districts,  when  in  a  couple  of  days  after  I  had  made  the  change  of  detail,  Mr.  Mc- 
Mullen,  the  appraiser  of  the  port,  notified  me  in  writing  that  I  must  replace  the  men 
on  the  districts  assigned  to  them  by  Mr.  Bowne.  This  official  notification  I  took  home, 
as  I  did  not  consider  my  desk  a  safe  place  to  keep  it,  it  having  only  an  ordinary  lock 
and  key,  and  I  desire  to  keep  that  notification  for  my  own  protection. 

By  this  letter  I  understood  that  I  was  relieved  from  any  authority  and  had  no  right 
to  make  details  of  samples  to  sugar-sampling  districts.  I  have  this  notice  from  the  ap- 
praiser in  my  possession  still  and  will  let  you  see  it,  but  will  not  let  you  make  a  copy 
of  it  or  retain  it  in  your  possession  without  the  order  of  my  superior,  recognizing  at  the 
same  time  that  Special  Officer  T.  Aubrey  Byrne  and  Special  Agent  H.  A.  Moore  are 
conducting  this  investigation  by  authority  and  direction  of  the  hon.  Secretary  of  the 


SEYMOUR  DURST 


i 


2 


FRAUDS  IN  NEW  YORK  CUSTOM-TTOUSE. 


Treasury,  but  think  if  it  included  the  delivery  to  them  of-  official  papers  or  documents 
he  would  have  so  uoted  it  in  his  communicattion  addressed  to  officers  and  employes 
dated  July  1st,  1887. 

Mr.  James  Burt  visited  the  sugar  division,  in  the  office,  and  requested  to  see  Exam- 
iner Remsen  in  my  presence,  and  I  said  certainly.  Whereupon  he  was  called  in,  and 
Mr.  Burt  said  in  substance  that  he  understood  Mr.  Remsen  had  been  before  the  sugar 
investigating  committee,  and  was  bound  to  secrecy,  and  that  he  did  not  want  to  ask 
him  any  improper  questions,  but  he  wished  to  ask  him  a  question  or  questions,  and  he 
then  asked  him  if  he  knew  if  anybody  had  said  that  he  had  more  influence  than  any- 
body else  at  the  appraiser's  store,  to  which  Mr.  Remsen  replied  that  he  could  not  think 
of  any.  A  day  or  two  previous  to  this  Mr.  Burt  was  in  the  8th  division  and  in- 
quired of  me  if  I  knew  Special  Agent  Moore,  or  whether  he  was  an  acquaintance  of 
mine,  and  I  replied  that  I  had  never  seen  him  but  twice. 

Mr.  Burt  visits  the  8th  division  nearly  every  day.  Mr.  Dreyfous  and  other  brokers 
sometimes  send  a  clerk  or  messenger,  but  I  have  never  known  Mr.  Burt  to  send  any- 
body. I  think  Mr.  Remsen,  the  sugar  examiner,  is  an  upright  and  conscientious  officer. 
Mr.  Remsen  is  next  to  me  in  authority,  as  I  understand  it,  in  the  8th  division,  and 
has  sole  charge  of  the  sugar  room.  I  believe  all  sugars  are  sampled  by  mark  as  they 
are  laid  out.  Mr.  McElwee,  the  examiner,  sent  me  a  note  complaining  of  Jas.  Ma- 
loney,  the  sampler,  detailed  to  convey  samples  from  docks  to  appraiser's  store,  stating 
that  he  was  in  the  habit  of  permitting  his  son,  who  was  not  a  sworn  officer,  to  drive  the 
wagon  to  the  appraiser's  store,  he  not  accompanying  them. 

Mr.  Bowne,  another  examiner,  later  on,  or  about  the  same  time,  called  my  attention 
to  the  same  fact,  which  I  reported  to  the  appraiser  in  writing,  I  think;  and  I  there- 
upon ordered  the  practice  stopped,  and  that  under  no  circumstances  should  the  samples 
be  taken  from  the  docks  except  in  charge  of  a  sworn  officer.  This  order  was  given 
under  authority  of  the  appraiser.  *I  have  received  a  letter  from  Verrinder  &  Callaghan, 
Wall  street,  N.  Y.,  representing  a  number  of  sugar-houses,  complaining  that  they 
did  not  get  the  sugar  samples  belonging  to  their  firms  that  they  were  entitled  to.  I 
sent  the  letter  to  the  appraiser,  who  directed  me  to  investigate  it. 

I  then  called  in  Mr.  Jas.  Dale,  of  the  sugar-room,  in  charge  of  the  returnable  sam- 
ples, who  informed  me  they  were  getting  all  they  were  entitled  to,  and  I  notified  the 
appraiser  that  it  seemed  to  be  a  question  of  veracity  between  Mr.  Dale  and  the  com- 
plainants. It  has  been  the  practice  among  officers  and  employes  of  the  8th  division  to 
hand  Mr.  Dale  their  vouchers  to  get  their  checks  on  the  last  day  of  the  month.  Mr. 
Trainer  or  Mr.  Johnson  mail  notices  of  classification  of  sugar  at  close  of  business  each 
day,  except  those  that  are  called  for,  and  I  think  Mr.  Burt  gets  all  of  his  notices  by 
calling  for  them.  I  know  of  no  violation  of  the  regulations  or  irregularity  in  this  pro- 
cedure. I  do  not  consider  it  any  annoyance  to  the  employes  of  the  8th  division  by 
these  visits  of  the  sugar  representatives.  I  .have  never  known  but  one  re-test  being 
asked  for.  I  have  never  known  Mr.  Burt  to  be  in  the  sugar-room,  or  heard  if  he  has 
been  there,  and  if  he  has  it  was  without  my  consent.  This  statement  will  apply  to  all 
sugar  brokers. 

I  was  informed  by  the  firm  of  Smith  and  Shipper  that  they  requested  re-sample.  The 
examiner  refused  re-sample  on  the  ground  that  the  original  re-sample  packages  had 
been  destroyed,  and  the  request  was  refused  solely  on  that  account.  I  have  never  writ- 
ten an  order  permitting  the  removal  or  melting  up  of  sample  or  re-sample  packages. 
Samples  classified  by  Dutch  standard  are  not  placed  in  glass  bottles  and  sent  to  the 
custom-house.  I  know  of  no  regulation  permitting  non-performance  of  this  require- 
ment as  per  par.  32.  I  think  that  all  importations  of  sugars  at  this  port  are  reported 
upon  the  classification  sheet.  There  is  no  reason,  in  my  opinion,  why  any  material 
errors  should  occur  in  those  sheets. 

I  do  not  know  of  any  posting,  public  or  otherwise,  of  damage  allowances  on  sugars,  as 
I  have  nothing  to  do  with  them.  I  have  no  knowledge  of  any  regulation  permitting  or 
authorizing  sugar  importers  to  ask  for  re-test  other  than  the  custom  I  found  prevailing 
in  my  division  when  I  took  charge.  It  is  a  common  occurrence  for  merchants  to  ask 
for  re-test. 

I  make  this  statement  in  answer  to  interrogatories  propounded  to  me. 

Thomas  S.  Tice. 

Sworn  to  and  subscribed  before  me  this  6th  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byene, 

Spl.  Treasury  Officer. 


*On  page  —  lines  marked  1  and  2  were  changed  with  my  authority  and  in  my  pres- 
ence.— T.  S.  Tice. 

[The  sentence  above  referred  to  by  Mr.  Tice  originally  read  as  follows :  "  I  have  received  a  letter 
from  certain  representatives  of  a  number  of  sugar-houses  complaining  that  they  did  not  get  the 
sugar  samples  belonging  to  their  firms  that  they  were  entitled  to."— Printer.] 

AV^RV  ■ ""       0V,  \~  '  V" 

OURSJ 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


3 


Thos.  S.  Tice,  asst.  appraiser  of  the  8th  division,  makes  the  following  statement  this 
7th  day  of  July,  1887: 

I  have  carefully  read  the  sugar  sampling  regulations  of  1883,  1884, 1885,  and  1886  re- 
lating to  sugar  and  failed  to  find  any  order  of  Department  authorizing  a  re-test  of  a  sam- 
ple when  asked  for  by  an  importor  or  broker.  In  changing .  the  designation  of  a 
sampler  on  or  about  the  latter  part  of  March,  1887,  for  the  next  month,  in  which  action 
I  was  overruled  by  an  order  from  the  appraiser,  I  was  careful  not  to  violate  the  regula- 
tion which  requires  that  samplers  shall  not  be  on  any  given  district  longer  than  for  one 
month.  The  name  of  the  firm  which  has  the  right  to  obtain  from  the  sugar- room  at  the 
appraiser's  store,  the  residue  of  sugar  samples  of  firms  they  represent  is  Verrinder  & 
Callaghan,  No.  101  Wall  street,  N.  Y. 

On  or  about  May  28th,  1887,  a  request  was  made  in  writing  to  my  office  from  the  own- 
ers of  5,600  bags  of  sugar  at  the  refinery  of  Dick  &  Meyer  asking  that  a  re-sample  be 
made  of  said  cargo.  Sugar  Examiner  B.  D.  C.  Foskett  was  detailed  by  me,  through 
Examiner  Remsen,  to  re-sample  the  same.  Examiner  Foskett  found  that  of  the  total 
number  of  re-sample  bags  stenciled  <kU.  S.  Re-sample"  but  180  remained,  the  balance 
having  been  melted  up  in  the  refinery.  He  thought  that  the  bags  gave  evidence  of 
having  been  freshly  stenciled,  as  also  did  his  samplers,  Twamley  and  Mills,  whereupon 
he  refused  to  make  re-sample.  All  papers  in  this  case,  with  the  facts  relating  thereto, 
were  submitted  to  the  appraiser,  and  subsequently  returned  by  him  to  me.  I  have 
heard  nothing  further  in  this  case. 

If  Mr.  Dale,  the  messenger  and  opener  and  packer  connected  with  the  sugar-room, 
gets  the  residue  from  sugar  samples,  it  is  without  my  knowledge  or  consent.  I  have  no 
person  detailed  to  demand  passes,  and  as  a  matter  of  fact  did  not  know  that  a  pass  was 
requisite  for  admission  to  the  8th  division.  This  statement  is  made  in  answer  to  inter- 
rogatories propounded  to  me. 

Thomas  S.  Tice. 

Sworn  and  subscribed  to  before  me  this  7th  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 

Spl.  Treasury  Officer. 


To  Asst.  Appraiser  8th  Division: 

Wanted:  Letter  of  Appraiser  Hay  authorizing  examiners  to  do  as  well  as  they  can  in 
sampling  mark  by  mark. 
Can  find  no  such  letter. 

C.  H.  Trainer. 

New  York, 

XJ.  S.  Appraiser's  Store,  July  9th,  1887. 


New  York,  July  30,  1887. 
T.  S.  Tice,  asst.  appraiser  8th  division,  further  states  as  follows: 

The  day  following  the  examination  of  Examiner  McElwee  by  you,  on  or  about  the 
23d  instant,  I  was  waited  upon  in  my  office  by  Examiner  R.  E.  Bowne  and  Samplers  P. 
Leimbach,  A.  G.  Mundy,  and  P.  T.  Rahl. 

Mr.  Bowne  then  requested  these  gentlemen  to  make  their  statement  to  me,  which 
they  did  to  the  following  effect:  That  Examiner  McElwee  had  intemperate  habits,  and 
that  upon  one  occasion  had  seen  him  in  his  district  office  intoxicated. 

To  this  I  replied  that  they  should  present  their  charges  in  writing,  since  which  time 
I  have  not  heard  from  them. 

I  asked  them  when  this  occurred,  and  they  replied  in  last  May. 

As  these  men,  if  their  statement  is  correct,  should  have  reported  this  occurrence  when 
it  happened,  I  am  led  to  believe  that  they  have  only  done  so  now  in  order  to  damage 
any  testimony  that  may  have  been  given  by  Examiner  McElwee  before  you. 

Thomas  S.  Tice, 
U.  S.  Appraiser,  Port  of  New  York. 

To  Ass't  Appraiser  T.  S.  Tice  : 

The  following  articles  will  hereafter  be  passed  in  the  1st  division,  viz  :  Confectionery, 
glucose,  honey,  molasses,  melado,  and  sugar,  and  the  following  articles  have  been  trans- 
ferred from  the  1st  division  to  the  8th,  to  wit :  Personal  effects  and  sample  office  pack- 
ages. 

Very  respt., 

Lewis  McMullen, 

Appraiser. 

July  3Q,  '87. 


4 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE 


Exhibit  100. 

New  York,  July  7,  1887. 

Robert  E.  Bowne,  examiner  8th  division  U.  S.  appraiser's  store,  states  as  follows: 

1  was  appointed  originally  in  1866  laborer  at  the  public  store;  March  4,  '70,  was 
made  opener  and  packer;  July,  '78,  was  made  examiner,  which  position  I  now  hold  at 
a  salary  of  $2, 500  per  year. 

By  authorization  of  Ass't  Sec'y  Fairchild,  May  18,  1885,  permission  was  granted  Ap- 
praiser McMullen  to  detail  me  "to  supervise  the  sampling  of  sugars  and  attend  to  the 
verification  of  original  sampling  when  in  the  judgment  of  the  appraiser  this  maybe  nec- 
essary for  the  protection  of  the  revenue." 

In  the  latter  part  of  March  of  this  year  I  made  out  the  usual  detail  of  samplers,  as  it 
was  customary  for  me  to  do  under  instructions  of  former  ass't  appraiser  Frank  Hay, 
and  also  endorsed  by  verbal  authority  of  Appraiser  McMullen,  and  handed  the  list  to 
the  present  ass't  appraiser,  Mr.  Tice,  my  superior  officer  in  the  sugar  division.  Mr. 
Tice  folded  up  the  paper,  placing  it  on  his  desk  without  considering  it,  remarking,  "Do 
not  promulgate  this  list,  as  I  shall  make  several  changes  in  it."  I  then  went  to  the  ap- 
praiser and  stated  the  facts  to  him,  when  he  asked  me  what  changes  Mr.  Tice  proposed 
to  make  in  the  list.  I  told  him  that  I  did  not  know,  as  Mr.  Tice's  list  was  not  yet 
given  out,  and  told  him  also  that  perhaps  it  might  be  best  in  the  matter  to  wait  until 
Mr.  Tice's  list  was  made  out,  as  I  understood  from  Mr.  Tice  that  he  would  make  sev- 
eral changes  in  the  detail. 

One  or  two  days  after,  Ass't  App'r  Tice  sent  for  me  and  asked  me  if  I  had  a  copy  of 
the  original  list  I  had  given  him,  as  he  had  destroyed  the  first  one.  My  reply  was,  1 '  No, 
sir;  but  I  could  draught  another  one,"  which  I  did,  and  he  approved  it,  as  originally 
submitted  to  him  by  me.  In  other  words,  my  detail  was  approved  by  the  appraiser  and 
was  allowed  to  stand,  while  the  proposed  changes  by  Mr.  Tice,  the  ass't  appraiser,  was 
not  permitted.  There  were  thpee  or  four  changes  in  Mr.  Tice's  detail,  I  think,  the  most 
prominent  change  being  that  of  Sampler  McDermott  from  district  No.  2,  on  which  the 
relineries  are  located,  to  district  No.  1.  I  desired  that  Mr.  McDermott  should  serve  on 
No.  2,  to  more  properly  equalize  the  work.  The  details  of  sugar  samplers  have,  since 
that  time,  been  made  by  me,  although  always  submitted  by  me  to  Mr.  Tice.  Mr.'Rem- 
sen,  the  examiner,  is  rated  as  next  in  rank  to  the  ass't  appraiser,  and  is  recognized  as  in 
charge  of  the  sugar-room,  having  particular  charge  of  invoices  and  preparation  of  sam- 
ples for  laboratory.  I  assist  Mr.  Remsen  occasionally  with  his  duties  when  my  outside 
duties  permit,  and  have  sole  charge  of  details  and  general  supervision  of  the  sampling 
and  re-sampling.  The  other  examiners  act  under  my  directions.  From  information 
which  I  had  received  from  various  sources  I  was  led  to  believe  that  my  prerogatives  as 
in  charge  of  the  outside  work  of  the  8th  division  were  to  be  curtailed  on  the  ground 
that  I  had  been  showing  favoritism. 

It  is  not  the  custom  to  draw  samples  from  ceroons,  mats,  and  bags  and  mix  them  on 
paper  on  the  wharves.  Tins  are  always  provided  and  used,  but  in  making  up  samples 
from  Philippine  Island  sugars  occasionally  samples  are  made  upon  the  wharf  on  paper, 
but  very  rarely.  Samplers  and  examiners,  and  I  think  Teamsters  Keely  and  Maloney, 
have  keys  to  sample  boxes.  Under  Ass't  Appraiser  Hay,  Maloney  for  some  time  was 
not  required  to  accompany  the  wagon  on  account  of  severe  illness,  while  his  son,  not 
a  sworn  officer,  conveyed  the  samples.  My  instructions  to  district  examiners  are  to 
carry  the  keys  of  the  closets  where  samples  are  left  over  night.  I  have  carefully  scru- 
tinized the  sugar  sampling  regulations  of  May  22,  '83,  but  can  find  no  authority  for 
granting  re- tests  upon  application  of  importers,  and  I  have  no  knowledge  of  any  Depart- 
ment authority  of  any  kind  on  the  subject.  Relative  to  the  sampling  of  sugars  not  laid 
out  mark  by  mark  as  required  by  regulations,  and  in  cases  where  the  marks  are  obliter- 
ated, action  is  taken  as  follows:  The  examiners  are  instructed  by  me  where  marks  are 
distinguishable  in  all  cases  to  sample  only  by  mark;  where  marks  are  obliterated  the 
representative  packages  are  taken  and  an  additional  percentage  taken  from  general  cargo 
lor  comparison. 

I  have  never  instructed  the  district  examiners  or  samplers  to  refuse  to  sample  cargoes 
of  sugar  that  were  not  laid  out,  mark  by  mark,  but  have  instructed  them,  as  stated,  to 
take  an  additional  percentage  of  samples  from  the  general  cargo,  to  protect  the  Government 
as  well  as  possible.  It  is  a  fact  that  large  quantities  of  sugar  come  to  this  port,  not  in- 
dicated on  the  invoice,  mark  by  mark,  whereby  great  difficulty  is  experienced  by  the 
appraising  officer  to  properly  classifying  said  sugars  and  also  jeopardizing  the  proper 
collection  of  duties.  And  it  is  also  a  fact  that  marks  of  sugars  are  indicated  on  invoices, 
while  the  permit  checked  by  the  deputy  collector  orders  the  per  cent,  to  be  sampled, 
without  regard  to  mark,  thereby  causing  a  great  deal  of  unnecessary  labor,  delay,  and 
risk  to  the  customs  revenue,  and  forcing  an  amount  of  responsibility  upon  the  apprais- 
ing officers  that  does  not  properly  belong  to  them. 


FRAUDS  IN  NEW  YOKK  CUSTOM-HOUSE, 


5 


It  is  a  fact  well  known  to  nie  that  the  U.  J3.  weighers  of  the  surveyor's  department, 
when  weighing  sugars,  ignore  the  proper  sugars  belonging  to  the  proper  mark  and 
simply  weigh  out  enough  sugar  to  represent  that  mark,  irregardless  of  what  the  mark 
may  be  upon  the  sugar,  and  by  which  means  the  proper  collection  of  the  revenue  is 
imperilled.  This  is  not  the  rule,  but  it  frequently  occurs.  It  is  a  fact  that  Iloilo  and 
Manila  sugars  are  rarely  laid  out  properly,  mark  by  mark,  therefore  the  proper  classi- 
fication of  these  sugars  is  imperilled,  and  where  we  can  not  lay  them  out  mark  by  mark, 
although  it  is  not  our  business  to  do,  we  use  our  own  labor  and  sample  them  as  ' '  best 
we  can,"  according  to  the  custom  in  vogue  at  the  appraiser's  store.  There  have  been 
many  cases  under  my  observation  where  invoices  of  sugar  do  not  properly  declare  the 
grades  and  kinds  of  sugar  covered  by  the  invoice,  making  it  a  great  difficulty  to  properly 
collect  the  revenue.  I  should  say  that  we  have  been  receiving  in  the  last  two  years  at 
this  port  larger  quantities  of  South  American  sugars  than  ever  before.  This  also  ap- 
plies to  sugars  from  the  Philippine  Islands  (Iloilo,  Manila,  Cebu). 

The  use  of  properly  indented  tin  tags,  indicating  the  mark  and  grade  of  the  sugar, 
would,  in  my  opinion,  if  attached  to  every  package,  greatly  simplify  the  selection  of 
packages  by  mark  and  would  better  enable  the  collection  of  the  revenue.  They  could 
be  fastened  to  wooden  packages  by  tacks  and  to  ceroons,  mats,  and  bags  by  wire. 

My  instructions  to  the  district  examiners,  and  by  them  promulgated  to  the  samplers, 
relative  to  keeping  their  triers  clean,  are  that  they  shall  use  the  crocus-cloth  and  sweet 
oil  prescribed  by  regulations.  There  is  necessity  for  the  use  of  sponges,  but  not  wet 
ones.  This  is  not  permitted  by  the  regulations,  but  it  was  authorized  by  Special  Agent 
Ira  Ayer,  who  instructed  all  of  us  in  the  matter  at  the  same  time.  It  is  not  a  fact  to 
my  knowledge  that  samplers  use  a  soaking  wet  sponge  upon  their  triers  before  insert- 
ing them  in  the  sample  packages.  I  have  known  a  few  instances  where  this  has  been 
done,  and  have  reprimanded  the  sampler  whenever  I  have  known  it.  I  have  instructed 
the  examiners  from  time  to  time  to  pay  particular  attention  and  prevent  the  practice  of 
using  wet  sponges. 

A  few  months  since  my  attention  was  called  by  Examiners  Remsen  and  Davis  to  some 
samples  that  were  too  wet.  I  investigated  the  matter  and  found  that  water  had  reached 
the  sample  cans  through  accident  on  the  part  of  some  sampler  wringing  his  sponge.  I 
brought  this  to  the  attention  of  the  examiners  and  samplers,  showing  them  the  samples, 
and  explaining  how  ruinous  to  the  revenue  the  use  of  water  is  to  samples,  and  as  pun- 
ishment I  ordered  the  discontinuance  of  the  use  of  sponges  on  short  triers  for  one  week. 
In  the  use  of  sponges  on  the  long  triers  on  sampling  hogsheads  the  sponge  is  drawn 
through  the  trier  each  time  before  inserting  it  in  another  sample  package.  But  one 
sponge  is  used.  In  the  case  where  water  might  be  left  in  the  triers  I  always  instruct 
the  sampler  to  draw  his  thumb  down  through  the  groove  in  the  trier,  that  all  the  water 
which  might  remain  in  the  trier  be  eliminated. 

A  short  time  since  I  discovered  that  water  had  been  immoderately  used  in  seven  or 
eight  sample  cans.  Inquiry  made  of  the  examiner  (Mr.  McElwee)  in  charge  of  the 
district  failed  to  develope  who  the  sampler  was,  and  in  the  absence  of  proof  could  do 
nothing  but  reject  the  samples.  That  is  the  custom  in  the  sugar-room  in  such  cases. 
My  instructions  to  samplers  are,  in  regard  to  sampling  packages  which  have  become 
footy  or  low  in  grade,  to  take  of  such  packages  a  fair  representation  of  the  free  and  the 
footy.  I  can  not  think  of  any  violation  of  this  direction.  A  man  acting  contrary  to 
these  instructions  I  would  at  once  report  lor  removal.  In  regard  to  sampling  sugar  in 
mats,  in  which  the  sugar  has  become  crusted,  my  orders  are  to  break  out  the  crust  and 
get  into  the  free  sugar.  To  sample  these  bags  a  knife  is  used,  though  I  understand  at 
Philadelphia  a  short  trier  is  used.  Mr.  Hay,  late  asst.  appraiser,  ordered  the  discon- 
tinuance of  the  use  of  red  plugs. 

In  regard  to  the  melting  up  of  sample  packages  referred  to  in  Art.  28  of  the  regula- 
tions, examiners  on  the  sampling  districts  over  the  Government  telephone  have  com- 
municated me  and  inquired  whether  or  not  the  sample  packages  could  be  melted  up.  I 
have  replied  that  so  far  as  we  were  concerned  the  test  was  satisfactorv,  and  that  the  rep- 
resentative of  the  importer  was  satisfied  with  the  classification.  Frequently  it  is  the 
case,  when  re-samples  have  been  required  by  the  importer,  that  they  have  already  been 
melted  up,  and  it  has  also  happened  when  the  Government  required  re-samples,  as,  for 
instance,  in  the  Hunt  cargo  (Moore-Wood  case). 

In  five  Government  sampling  districts  telephonic  communication  is  had  direct  with 
the  sugar-room,  and  it  is  of  daily  occurrence  that  instructions  issue  between  the  districts 
and  the  sugar-room  over  said  wire. 

We  do  not  consider  the  classification  of  a  cargo  of  sugar  completed  until  the  importer 
accepts  said  classification  ;  where  the  importer  is  dissatisfied  with  the  classification,  he, 
within  the  24  hours,  asks  for  re-test,  subject  to  re-sample  in  nearly  every  instance.  I 
consider  that  it  is  the  business  of  the  importer's  representatives  or  brokers,  evidenced 
by  his  presence  at  the  appraiser's  store,  to  facilitate  in  every  way,  if  possible,  the  rapid 
and  satisfactory  classifications  of  his  goods  and  passage  of  his  invoices;  and  by  obtaining 
re-tests  of  the  marks  he  objects  to,  he  does  receive  satisfactory  classification.   I  have 


6 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


known  some  instances  where  retained  sample  of  the  re-sample  had  been  re-tested,  thus 
making  four  tests  of  a  certain  mark  on  application  of  the  importer  or  his  representative. 

brokers  Burt  and  Dreyfoos  visit  the  sugar  division  in  the  interest  of  their  clients 
nearly  every  day,  as  they  represent  the  largest  refining  and  importing  interests  at  this 

port. 

District  No.  2,  in  which  are  located  the  refineries,  receives  more  than  one-half  the 
imports  at  this  port,  in  my  opinion. 

On  the  day  of  June,  1887,  A.  Lueder  &Co.  imported  22, 000  bags  South  American 

sugar,  Ex.  "Crown  Prince."  It  was  landed  at  Watson's  stores,  District  No.  3.  Mr. 
McElwee,  sugar  examiner,  was  in  charge  of  the  cargo.  The  importer  asked  for  a  re- 
sample.  After  the  re-sample  had  been  drawn,  a  fraudulent  stencil  plate  (  U.  S.  Re- 
Sample  ")  was  found  in  the  cargo,  in  the  warehouse,  which  occasioned  considerable  sus- 
picion. The  original  test  for  classification  of  the  sugars  was  85.3,  and  that  of  the  re- 
sampie  84.9,  the  latter  lowering  the  rate  for  duty  one  full  degree.  This  suspicious  affair 
was  evidently  an  attempt  on  the  part  of  some  one  to  defraud  the  Government.  Before 
giving  out  the  result  of  the  re-sample,  we  took  a  third  sample  from  the  general  cargo, 
tested  it,  and  as  the  test  conformed  to  the  first  re-sample,  we  allowed  the  classification 
for  duty  to  stand.  This  was  satisfactory  to  the  importers.  The  reason  that  I  know 
this  was  a  fraud  stencil  is  because  of  the  fact  that  the  lettering  of  the  stencil  which  had 
been  put  upon  the  bags  was  in  many  respects  different  from  the  lettering  cut  in  the 
fraudulent  plate.    I  have  heard  and  known  of  similar  transactions  at  this  port  before. 

I  do  not  extend  any  facilities  to  Mr.  Burt  that  I  do  not  accord  to  others,  and  I  might 
perhaps  add  with  truthfulness  that  I  might  inconvenience  myself  a  little  more  to  accommo- 
date Mr.  Dryfoos,  who  is  generally  looking  after  his  client's  interests  on  the  docks,  while 
I  have  never  seen  Mr.  Burt  on  the  docks  at  all.  Mr.  Dryfoos  is  on  the  dock  sometimes 
before  our  employes  get  there,  oftentimes  accompanying  them  to  their  work.  As  a  rule 
he  stays  there  until  our  samples  are  drawn. 

From  general  impression  and  observation,  I  am  led  to  believe  that  Mr.  Burt  and  Mr. 
Dryfoos  are  not  on  friendly  terms. 

Of  the  examiners  and  samplers  employed  at  the  present  time  I  know  of  no  act  traced 
to  them  which  would  shake  my  confidence  in  their  integrity. 

I  have  been  informed  by  Examiner  Remsen  that  sugar  broker  Jas.  Burt  called 
him  out  of  the  sugar-room  and  catechised  him  in  reference  to  his  examination  on  the 
pending  investigation  of  sugar  matters.  Mr.  Remsen  asked  me  if  I  did  not  know  that 
it  had  been  stated  that  Burt  run  the  sugar  division.  I  replied  that  I  had  heard  it  stated, 
but  by  parties  whom  I  did  not  consider  responsible.  Among  those  were  Mr.  Dryfoos, 
the  sugar  broker,  and  some  of  the  discharged  employes  of  the  sugar  division.  I  knew 
Capt.  Osborn,  chief  clerk,  and  Mr.  Jos.  A.  Lackey,  record  clerk,  both  formerly  in  the 
sugar  division.  I  always  considered  Capt.  Osborn  an  upright,  honorable,  and  credible 
man.  As  to  Mr.  Lackey,  I  know  nothing  against  his  integrity,  although  I  would  not 
give  the  same  weight  to  his  word  that  I  would  to  that  of  Capt.  Osborn. 

If  an  invoice  of  Iloilo  sugar  was  written  up  thus, 

I.  Iloilo,  89-70, 
II.  Iloilo,  89-70, 
III.  Iloilo,  89-70, 

it  would  seem  to  me  that,  from  obliteration  of  marks  or  other  cause,  the  cargo  could  not 
have  been  regularly  sampled  mark  by  mark.  The  fact  is  that  frequently  cargoes  of  Iloilo 
sugars  come  in  such  a  manner  that  they  can  not  be  properly  laid  out  mark  by  mark,  and 
a  general  sample  is  taken  from  the  cargo,  care  being  taken  by  the  samplers  to  take  a  per- 
centage of  each  grade. 

The  Government  should,  in  my  opinion,  insist  upon  a  different  method  of  making  out 
sugar  invoices  from  the  Phillipine  Islands,  and  a  regulation  requiring  the  proper  mark- 
ing of  grades  would  have  a  salutary  effect  and  inure  to  the  safety  of  the  revenue.  In 
my  experience,  Iloilo  sugars  have  come  in  with  marks  inverted  thus:  Those  marked  No 
1  might  show  No.  3  mixed  with  them,  and  the  same  with  No.  2  ' 1  and  No.  3, ' '  and  on 
account  of  this  mixing  of  marks  the  int?rests  of  the  revenue  are  imperilled. 

It  is  a  fact  that  importers  of  sugar  do  receive  private  advices  from  the  shipper  which 
explain  facts  as  to  the  make-up  of  the  cargo,  which  do  not  appear  upon  the  invoices.  I 
do  not  say  that  this  is  the  rule,  but  I  do  know  that  it  does  occur  in  some  cases.  Take 
for  instance  a  cargo  of  Porto  Rico  sugar,  seven  hundred  and  eighty-five  hogsheads,  in- 
voiced and  permitted  "  no  marks"  "N.  M.,"  and  yet  as  a  matter  of  fact,  we  find  upon 
applying  to  the  importers  or  their  representatives,  twenty  to  twenty-five  marks  of  high 
and  low  grade  sugars,  twenty-five  hogsheads  going  above  No.  13  D.  S.  It  is  only  by 
the  exercise  of  the  most  scrutinizing  care,  that  the  Government  revenue  is  not  de- 
frauded. A  general  sample  should  never  be  made  under  these  circumstances.  We  often 
find  that  the  U.  S.  sample  packages  have  been  sampled  by  importers'  samplers  before 
the  U.  S.  sampler  draws  his  sample,  which  is  in  violation  of  the  regulations,  and 
should  not  be  allowed.  We  have  protested  again  and  again  to  the  collector's  officers, 
but  have  never  received  any  satisfaction  therefrom, 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE.  7 

Some  years  ago  samplers  were  instructed  to  refuse  to  draw  samples  from  mutilated 
sample  packages,  but  this  is  not  an  enforced  order  to-day.  It  is  a  fact  that  as  soon  as 
the  sample  packages  are  laid  out  they  are  trucked  into  the  refineries,  tried  in  sampling 
order,  and  there  remain  until  our  samplers  have  completed  their  work,  though  24  hours 
or  more  may  elapse,  giving  a  dishonest  refiner  the  opportunity,  if  so  disposed,  to  mani- 
pulate the  sample  packages.  I  know  of  a  case  of  this  kind  which  happened  in  connec- 
tion with  the  Brooklyn  sugar  refluery,  (W.  C.  Jacobs,  examiner)  and  two  other  cases 
that  were  unsatisfactory  and  appearing  to  give  evidence  of  the  manipulation  of  the  sam- 
ple packages,  and  because  they  (the  importers)  never  protested  to  our  action  in  refusing 
to  take  the  possibly  manipulated  sample  packages,  it  tended  to  prove  that  some  manip- 
ulation had  taken  place.  This  applies  more  particularly  to  the  first  case  mentioned, 
and  which  occurred  about  a  year  since.  Other  cases  are:  Elenenhorst  &  Co.,  Swift  & 
Co. ,  McDonald  &  Co. 

Examiners  are  invariably  present  when  samplers  are  drawing  their  samples. 

I  never  saw  a  tabulated  statement  of  damage  allowance  posted  as  required  by  regula- 
tions. 

Some  means  should  be  found  whereby  invoices  could  be  written  up  more  expeditiously, 
thus'  looking  to  the  better  interests  of  the  service. 

Mr.  Jas.  Burt  has  his  reports  of  classification  as  soon  as  made  placed  handily  in  a  book 
or  blotter  for  his  inspection.    No  other  broker,  to  my  knowledge,  has  such  a  book. 

I  have  known  cases  of  imported  sugar,  the  invoices  of  which  was  indicated  mark  by 
mark,  but  the  U.  S.  samplers  found  that  the  samples  laid  out  did  not  represent  the  cargo 
mark  by  mark,  and  they,  the  samplers,  drew  their  samples  as  well  as  they  could,  the 
marks  being  obliterated  and  the  weighing  officers  acknowledging  that  the  sugars  could 
not  be  laid  out  mark  by  mark,  and  yet  the  weigher's  official  return  showed  that  the 
sugar  had  been  separated  mark  by  mark,  which  was  a  false  statement  on  the  part  of  the 
weigher.  In  many  of  these  cases  the  naval  officer  has  returned  the  invoice  to  the  8th 
division  for  reconsideration,  with  the  request  that  the  classification  be  made  to  conform 
to  the  weigher's  return. 

The  stencilling  of  sample  packages  is  done  by  a  laborer  of  the  weighing  officer,  while 
the  packages  should  be  stencilled  immediately  after  they  have  been  weighed.  I  know 
of  many  instances  where  this  has  not  been  done  until  some  time  thereaf  ter.  The  stencil 
is  not  kept  as  carefully  in  the  custody  of  the  weigher  as  it  should  be,  for  in  the  Elmen- 
horst  &  Co.  case  the  laborer  was  able  to  obtain  the  stencil  from  the  weigher's  frame 
and  use  it  fraudulently  during  the  noon  hour.  The  case  was  investigated  by  Spl.  Agent 
Hanlon. 

I  know-that  Broker  Dryfous  has  asked  the  samplers  to  give  him  a  show  in  sampling 
the  sugars  he  represented. 

Weighing  is  often  done  while  it  has  been  raining,  and  samples  have  been  drawn  in 
wet  weather,  but  always  under  cover. 

I  know  that  it  has  been  the  custom  at  the  Havemeyer  &  Elder  S.  refinery  to  have 
the  sample  and  re-sample  packages  (bags,  mats,  etc.)  moved  into  the  refinery  ware- 
house and  afterward  the  sample  packages  re-handled  and  placed  in  sampling- tiers,  and 
sometimes  distant  from  where  they  were  originally  placed.  This  has  been  done  by  the 
employes  of  the  refinery,  but  I  have  cautioned  the  examiners,  particularly  in  the  case  of 
re-sample,  to  give  as  close  attention  to  this  work  as  possible. 

Fully  two-thirds  of  our  work  is  done  at  this  refinery. 

Sampling  is  sometimes  done  as  late  as  6  o'clock  when  handling  a  large  cargo  during 
the  busy  season.  The  sample  wagons  make  two  and  sometimes  three  trips  a  day  be- 
tween the  appraiser's  store  and  the  sugar  districts  when  necessary. 

So  far  as  I  know  article  32,  relating  to  the  sending  to  the  custom-house  of  samples  of 
sugars  above  No.  13  D.  S.,  is  not  complied  with.    The  reason  for  this  I  do  not  know. 

The  amount  of  sugar  classed  as  above  No.  13  D.  S.  imported  at  this  port  is  very  small, 
not  aggregating  five  tons  a  year. 

In  making  up  the  exchange  tabulated  sheets  of  sugar  imports  and  classification  at 
this  port  great  care  is  exercised  to  have  them  correct. 

In  my  opinion  samples  of  sugar  tested  in  the  dry  substance,  and  exchanged  between 
the  ports  of  New  York,  Boston,  and  Philadelphia,  should  show,  if  the  tests  correspond, 
that  the  chemists  at  the  three  ports  were  evidently  reading  their  instruments  correctly. 

As  I  consult  the  Boston  tabulated  sheets  I  find  that  from  them  it  does  appear  that 
imported  sugars  at  that  port  pay  a  higher  rate  of  duty  than  is  collected  at  the  ports  of 
New  York  and  Philadelphia. 

It  is  my  belief,  however,  that  Boston  receives  a  higher  grade  of  sugar  than.  New  York. 
This  I  learn  from  information  that  I  have  received  from  refiners  and  others,  but  of*  this 
I  have  no  personal  knowledge. 

RfJBT.  E.  BoWNli. 

Sworn  and  subscribed  before  me  this  9th  day  of  July,  A.  D.  1887. 

T.  Auhky  Byrne, 

g   E      a  59  Sp'l  Treasury  Officer. 


8 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


Exhibit  101. 

John  S.  McElwee,  examiner  8th  division,  states  as  follows  : 

I  was  originally  appointed  in  October,  1885,  as  sugar  sampler,  and  made  examiner  in 
April,  1886,  since  which  time  I  have  been  generally  employed  in  examiner's  duties. 
Mr.  Tice,  when  he  was  first  appointed  assistant  appiaiser,  told  me  that  he  intended 
taking  charge  of  the  detail  of  examiners  and  samplers,  as  that  had  been  the  custom  of 
his  predecessor  iu  office,  and  looked  upon  it  as  his  prerogative.  He  said  he  was  pre- 
sented with  a  list  of  the  detail  by  Mr.  Bowne,  as  made  by  him  (Mr.  Browne),  and  that, 
in  looking  at  it,  he  deemed  it  advisable  to  make  some  changes.  He  indicated  the 
changes  to  be  made  on  the  list.  After  he  had  done  this  he  told  me  that  he  had  re- 
ceived written  orders  from  the  appraiser  to  the  effect  that  he  must  not  interfere  with 
the  list  as  originally  made  out  by  Mr.  Examiner  Bowne,  and  showed  me  the  appraiser's 
order.    From  that  time  to  this,  some  months,  Examiner  Bowne  has  made  the  details. 

On  one  occasion  I  questioned  the  authority  of  Examiner  Bowne  to  direct  and  super- 
vise me  over  the  head  of  the  assistant  appraiser,  and  in  a  talk  with  the  appraiser  on  the 
subject  told  him  that  it  did  not  seem  proper  to  you  to  be  under  orders  from  an  examiner 
of  the  same  rank  as  myself  when  there  was  a  head  to  the  division  in  the  person  of  the 
assistant  appraiser.  He  informed  me  that  Examiner  Bowne  had  been  assigned  by  the 
Secretary  of  the  Treasury  as  supervising  examiner,  and  that  I  would  have  to  take  orders 
from  him,  which  I  have  since  done.  While  Mr.  Tice  is  assistant  appraiser  and  the  recog- 
nized head  of  the  division  he  has  no  control  or  direction  of  the  examiners  and  samplers, 
Mr.  Bowne  being  looked  upon  virtually  as  the  head  of  the  division.  Mr.  Tice  told 
me  that  he  sought  and  expected  to  obtain  the  assistant  appraisership  of  the  2d  division 
(jewelry  and  precious  stones),  vice  Assistant  Appraiser  Stevens,  removed;  but  Mr. 
Stevens  being  re-instated  the  next  day,  Mr.  Tice  was  apuiuted  to  the  8th  division  as  being 
the  only  one  available.  It  was  generally  understood  by  the  employes  of  the  8th  division 
that  Examiner  Rerusen  was  Mr.  Sugar  Broker  Burt's  choice  for  the  assistant  appraiser- 
ship  lor  that  division. 

1  was  endorsed  by  every  sugar-house  at  this  port  (see  papers  now  on  file  at  the  De- 
partment) lor  the  assistant  appraisership  of  the  8th  division,  with  the  exception  of  Have- 
meyer  and  Elder,  whose  endorsement  1  did  not  look  for,  as  Mr.  James  Burt  was  their 
broker  and  felt  pretty  well  assured  that  he  would  favor  a  man  of  his  own  choice  for 
that  position.  I  do  recognize  the  fact  that  sugar-broker  Burt  has  great  influence  at  the 
appraiser's  store  in  matters  connected  with  the  8th  division  and  U.  S.  laboratory. 

Mr.  Burt  was  former  assistant  appraiser  of  the  sugar  division,  and  several  of  the  em- 
ployes now  in  that  division  were  officers  under  him.  The  samplers  and  clerks  who  were 
at  that  time  under  him  have  since  been  made  examiners — as,  for  instance,  Remsen, 
Bowne,  Davis,  and  Jacobs. 

In  detailing  samplers  for  duty  on  District  No.  2  (the  Havemeyer  &  Elder  district) 
such  samplers  as  Examiner  BoAvne  detailed  for  said  district,  1  understand  to  mean  and 
be  the  preferences  of  sugar  Broker  Burt.  I  think  that  nearly  everything  that  is  done 
that  concerns  the  division  and  which  is  of  any  importance  where  Burt's  interests  are  con- 
cerned are  talked  over  with  him  before  they  are  executed.  When  I  first  was  appointed 
in  the  8th  division  hints  were  thrown  out  to  me  and  iu  fact  I  was  given  to  understand 
that  I  must  do  nothing  to  antagonize  the  interests  of  Sugar  Broker  Burt  if  I  desired  to 
rise  in  the  service.  The  persons  who  gave  me  to  understand  this  fact  are  still  in  the 
service.  The  statements  were  made  to  me  during  my  service  as  sampler,  by  other 
samplers,  the  general  drift  of  their  statements  being  to  the  effect  that  Broker  Burt  had 
such  a  pull  at  the  appraiser's  store  it  would  be  to  every  man's  interest  not  to  antagonize 
him,  for  certain  removals  had  been  made  of  men  who  did  not  act  as  Mr.  Burt  might  de- 
sire. This  and  other  reasons  is  the^cause  of  my  belief  of  Mr.  Burt's  influence  at  the  ap- 
praiser's store,  and  I  am  not  alone  in  this  opinion. 

While  I  was  a  sampler  on  the  Havemeyer  &  Eider  district  the  samplers  would  not 
manipulate  any  samples  while  I  was  there.  In  fact,  I  do  not  believe  the  samples  are 
ever  manipulated,  except  that  they  are  manipulated  in  the  selection  of  the  sample  pack- 
ages, as  for  instance,  taking  and  selecting  the  poorer  packages  of  the  cargo  for  sample 
packages.  Whatever  further  manipulation  there  is,  is  in  the  mixing  and  testing  of 
samples  for  classification. 

If  I  was  supervising  examiner  I  would  recommend  the  removal  of  one-half  the  present 
force  of  samplers  and  make  certain  changes  in  the  present  force  of  examiners,  with  the 
recommendations  for  removal  of  one  or  two  of  them  on  the  ground  of  incapacity.  Another 
reason  why  I  would  recommend  removals  is  that  many  of  the  present  force  of  samplers, 
and  some  of  the  examiners,  have  been  in  the  past  associated  with  all  that  has  been 
charged  as  corrupt.  I  look  upon  their  present  retention  in  office  principally  to  the  pull 
that  Broker  Burt  has  at  the  appraiser's  store. 
When  I  have  been  on  duty  at  this  district,  meaning  in  the  sugar  room,  which  is  the 


FRAUDS  IN  NEW   YORK  CUSTOM-HOUSE 


9 


office  of  the  examiner  when  in  charge  of  this  (the  first)  district,  I  have  always  noticed 
that  the  presence  of  Sugar  Broker  Burt  was  always  signaled  to  the  employes  of  the 
sugar  room  in  some  such  terms  as  these:  "The  Col.  is  here;"  and  then  Examiner  Rem- 
sen  or  Mr.  Bowne,  whichever  happened  to  be  there,  would  immediately  take  the  test- 
book  which  Clerk  Johnston  keeps  and  carry  it  in  to  Mr.  Burt  in  the  outer  office  for  his 
inspection.  Sometimes  Clerk  Johnson  would  also  take  it  in.  The  manifest  impropriety 
of  any  sugar  broker  having  access  to  this  book  where  the  tests  of  all  importations  are 
recorded  is  unquestionable.  I  have  seen  Clerk  Trainor  come  into  the  sugar  room  and 
notify  the  employes  there  of  Col.  Burt's  presence,  and  then  either  Remsen,  Bowne,  or 
Johnson  would  carry  the  book  in  to  him. 

Previous  to  Mr.  Tice's  incumbency  as  assistant  appraiser  the  public  posting  of  the 
daily  classification  of  re-samples  wa6  never  done.  In  Havemeyer  &  Elder's  importa- 
tions at  that  time  it  was  the  rule  to  order  re-samples,  consequently  the  public  posting 
of  the  classification  of  that  firm's  re-samples  were  never  shown. 

At  my  suggestion  to  Mr.  Tice,  he  required  that  the  classifications  of  re-samples  made 
should  be  publicly  posted  daily,  which  I  understand  has  been  done,  and  thereby  has 
diminished  our  work  50  per  cent.,  and  the  more  noticeable  fact  is  that  now  Havemeyer 
&  Elder,  through  Broker  Burt,  hardly  ever  asked  for  re-samples,  but  they  continue  to 
ask  for  a  re-test. 

By  means  of  the  above  suppression  of  the  public  posting  of  re-sample  classification  the 
other  ports  have  been  kept  in  ignorance  of  the  true  classification  for  duty,  as  the  re- 
sample  almost  invariably  lowered  the  classification  from  one  to  two  degrees. 

I  believe  that  the  practice  in  this  omission  to  publicly  post  classifications  of  re-sam- 
ples was  done  at  the  instance  of  Mr.  Burt. 

I  have  heard  that  Broker  Burt's  brokerage  amounts  to  between  40  and  50  thousand 
dollars  a  year,  and  I  have  no  reason  to  doubt  the  accuracy  of  the  statement.  It  is 
generally  understood  among  business  men  in  the  trade  that  he  is  worth  all  he  receives 
to  his  clients,  or  he  would  not  receive  such  an  income. 

John  Stewart  McElwee. 

Sworn  to  and  subscribed  to  before  me  this  19th  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 

Special  Treasury  Officer. 
John  Stewart  McElwee, 
U.  S.  Sugar  Examiner. 


Mr.  T.  A.  Byrne. 

Dear  Sir:  During  the  last  week  in  the  mouth  of  November,  1886,  a  gentleman  called 
at  my  office  in  the  3rd  district  at  Harbeck's  stores  in  Brooklyn,  N.  Y.,  and  requested 
a  private  conversation.  On  going  out  on  the  dock  with  him  he  told  me  he  was  authorized 
by  the  appraiser  of  this  port  to  interrogate  me  on  the  subject  of  sampling  sugars;  he 
showed  me  a  card  inscribed  T.  A.  Byrne,  34  Green  ave.,  Brooklyn — 144  State  street, 
Boston.  I  told  him  I  could  not  recognize  him  as  coming  from  the  appraiser  until  he 
showed  me  some  written  authority  to  that  effect.  He  seemed  anxious  to  force  the  matter, 
but  left  on  seeing  me  obstinate.  This  person  was,  to  the  best  of  my  recollection,  about  5 
feet  7  inches  in  height,  about  45  years  of  age,  dark  hair  and  heavy  beard,  small  eyes. 
On  seeing  you  to-day  I  can  easily  see  you  are  not  the  person  of  the  same  name  who  then 
called  on  me. 

Very  respectfully, 

Jno.  Stewart  McElwee, 

U.  S.  Sugar  Examiner. 

N.  Y.,  July  20,  '87. 


John  S.  McElwee,  sugar  examiner  8th  division,  on  further  examination  states  as 
follows: 

I  have  heard,  and  it  is  tacitly  understood,  that  there  is  a  "  Burt  sugar  ring,"  the  ob- 
ject of  which  is  to  facilitate  the  obtaining  of  low  classification  of  sugars,  and  that  such 
low  classifications  of  sugars  have  been  obtained  is  in  my  mind  unquestionable.  Al- 
though Mr.  Tice,  assistant  appraiser  of  the  8th  division,  is  a  comparatively  new  officer, 
and  not  conversant  with  sugars,  yet  his  presence  has  had  a  salutary  effect  in  a  certain 
direction. 

I  was  appointed  to  fill  the  vacancy  made  by  Howard  G.  Gill,  examiner,  since  dead, 
and  among  the  effects  of  the  office  that  1  took  charge  of  was  a  letter  of  instruction,  as 
follows: 

Tout  of  Nfw  York,  Appraiser's  Office, 

402  Washington  Street,  August  1st,  1S85. 
Sir:  Mr.  Robert  E.  Bowne,  examiner,  having  been  detailed  to  supervise  the  sam- 
pling of  all  sugars  and  to  verify  original  sampling  when  in  the  judgment  of  the  appraiser 


10 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE, 


this  may  be  thought  necessary,  you  are  hereby  instructed  to  co-operate  with  him  in  all 
his  efforts  to  carry  out  the  requirements  of  Treasury  regulations  for  the  sampling  of  im- 
ported sugar  and  other  cane  products  dated  May  22,  1883. 

Frank  Hay, 
AssH  Appraiser  8th  Division. 

To  Howard  C.  Gill,  Esq.,  Examiner. 

• 

( Letter  annexed. ) 

This  letter  I  accepted  as  an  official  order,  and  I  have  governed  my  acts  since  in  ac- 
cordance therewith. 

I  was  told  by  Examiner  Bowne  that  the  late  assistant  appraiser,  Frank  Hay,  had 
written  the  Secretary  of  the  Treasury.  This  is  the  letter  to  which  I  refer,  and  which 
reads  as  follows: 

Port  of  New  York,  Appraiser's  Office, 

402  Washington  street,  31ay  2nd,  1885. 

Lewis  McMullen,  Esq., 

U.  8.  Appraiser : 

Sir:  Respectfully  referred  to  Department  letter  (H.  B.  J.)  under  date  of  the  27th 
inst.,  I  beg  to  say  that  I  greatly  desire  to  have  one  of  my  most  experienced  sugar  ex- 
aminers detailed  to  supervise  the  sampling  of  sugars,  and  attend  to  the  verification  of 
original  sampling,  when  in  the  judgment  of  the  appraiser  it  may  be  thought  nccessarv, 
for  the  protection  of  the  Government. 

With  your  approval  I  shall  name  Mr.  Robert  E.  Bowne  as  the  person  whose  long  ex- 
perience as  a  sampler  and  examiner  eminently  fits  him  for  this  position. 
Respectfully, 

Frank  Hay, 
Assistant  Appraiser  8th  Dir. 

To  that  letter  heobtained  an  order  appointing  Examiner  Bowne  supervising  examiner 
in  charge  of  examiners  and  samplers  at  this  port.    The  following  is  a  copy  of  the  order: 

Treasury  Depart3ient, 
Washington,  D.  C\,  May  18ih,  1885. 

Collector  of  Customs,  New  York: 

Sir:  In  accordance  with  the  recommendations  contained  in  your  letter  of  the  1 2th 
instant,  and  the  report  transmitted  therewith  of  the  U.  S.  appraiser  at  your  port,  you 
are  hereby  authorized  to  inform  that  officer  that  Mr.  Robert  E.  Bowne  of  his  office  may 
be  detailed  to  supervise  the  sampling  of  sugar,  and  attend  to  the  verifications  of  original 
sampling,  when  in  the  judgment  of  the  appraiser  this  may  be  necessary  for  the  protec- 
tion of  the  revenue. 

C.  S.  Fairchild, 

Assistant  Secretary. 

He  did  not  take  charge  of  examiners  and  samplers  until  the  present  assistant  ap- 
praiser, Mr.  Tice,  entered  his  office,  as  prior  to  that  time  Assistant  Appraiser  Hay  had 
immediate  charge  of  examiners  and  samplers. 

Mr.  McMullen  has  empowered  Mr.  Bowrue  with  far  greater  authority  than  he  had 
during  Mr.  Hay's  administration  of  the  8th  division. 

In  referring  back  to  the  matter  of  Assistant  Appraiser  Tice  being  relieved  of  making 
the  detail  of  samplers,  I  feel  that  the  reason  of  Mr.  Bowne  settling  the  matter  at  that 
time  was  because  Mr.  Tice  had  just  come  into  office,  and  it  was  necessary  for  hi  in  to 
establish  himself  in  the  beginning  firmly  and  positively;  otherwise  his  prestige  would 
be  gone,  and  he  would,  as  a  matter  of  fact,  have  nothing  to  do.  His  position  at  the 
present  time  is  nothing,  as  he  is  always  loafing  around  in  the  sugar-room;  but  prior 
to  the  last  month,  whenever  any  of  Havemeyer  &  Elder's  cargoes  are  in,  Mr.  Bowne 
is  always  present  at  the  sampling.  This  also  refers  to  any  cargoes  of  sugars  represented 
by  Broker  Burt. 

It  is  a  fact  that  sugars  arriving  at  the  premises  of  Havemeyer  and  Elder's  sugar  re- 
finery the  sample  bags  are  moved  well  within  the  precincts  of  the  refinery  premises,  and 
oftentimes  they  are  placed  in  extremely  dark  places. 

I  do  think  that  from  the  moment  the  sample  packages  are  designated  until  the  sugar 
is  drawn  and  classified  for  duty  they  should  be  under  the  direct  supervision  of  an  ap- 
praising officer.  About  June,  1887, 1  was  in  charge  of  the  re-sampling  of  the  "  Crown 
Prince "  at  Harbeck's  stores,  Brooklyn.  While  engaged  upon  the  work  one  of  my 
samplers,  by  name  Mills,  found  secreted  among  the  re-sampled  packages  a  stencil  plate, 
which  I  identify  as  the  one  now  shown  me  by  Mr.  Burne.  Sampler  Mills  handed  me 
the  plate,  and  from  the  marks  on  the  re-sampled  packages  I  could  see  very  readily  that 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


11 


this  plate  had  been  used  to  stencil  these  re-sampled  bags.  Inasmuch  as  this  was  a  sus- 
picious circumstance,  under  my  prerogative  as  an  examiner  I  directed  the  samplers  to 
take  5  per  cent,  from  the  general  c^rgo,  requesting  Mr.  Bowne  that  the  two  lots  be 
separately  tested.  I  was  told  by  Mr.  Bowne  that  the  separate  tests  had  been  taken, 
but  whether  it  was  so  or  not  I  don't  know. 
Copy  of  extiact  from  test-book  of  June,  1887: 

Crown  Prince,  from  Bahia,  April  28,  1887,  invoice  No.  178G5,  N.  M.,  22,485  bags,  in- 
voice to  A.  Luder. 

No.  of  sample  1429,  sent  to  laboratory  June  11;  dated  chemist's  report  June  11,  1887. 
No.  of  tests  made,  8 ;  they  were  as  follows:  84'40,  84'30,  83'80,  84'00,  84'80,  84'00, 
83' 30,  85' 00. 

Test  taken  for  classification,  85'00. 

When  I  was  a  sampler  in  January  or  February  of  1886,  at  the  (Watson,  I  think)  St. 
stores,  in  Brooklyn,  1  was  sent  by  Mr.  Davis,  sugar  examiner,  to  sample  a  cargo  of  Brazil 
sugar,  with  three  other  samplers.  Going  in  and  looking  at  the  cargo,  I  discovered  that 
the  sample  pa<  kages  had  been  plated  in  store,  which  fact  I  reported  to  Examiner  Davis. 
He  came  up  and  looked  at  the  cargo,  coincided  with  what  I  stated.  We  were  all  satis- 
fied that  the  sugar  had  been  stenciled  in  store  fraudulently  and  irregularly. 

Mr.  Davis  sent  me  up  to  the  chief  weigher,  Mr.  O'  Brian,  and  request  him  to  come 
down  and  see  him.  I  went  up'and  saw  Mr.  O'Brien;  he  came  down  shortly  afterwards. 
I  got  a  lantern  and  took  Messrs.  Davis  and  O'Brien  in  through  the  cargo.  Mr.  O'Brien 
was  satisfied  that  they  were  stencilled  there  irregularly,  and  to  the  best  of  my  recollec- 
tion Examiner  Bowne  was  sent  for;  he  came  over,  looked  at  the  cargo,  and  he  was  sat- 
isfied that  it  had  been  irregularly  stencilled. 

He  reported  the  matter  to  the  appraiser,  and  he  authorized  him  to  take  10  per  cent, 
from  the  general  cargo,  make  the  stores  people  break  into  the  cargo  in  different  places, 
and  reject  the  original  samples. 

Special  agents  had  been  notified  of  the  occurrence  in  some  way  and  two  of  them  came 
over  and  made  inquiries  and  found  the  plate  as  I  understand,  and  the  man  who  plated 
the  cargo — a  workman  now  in  the  stores.    I  never  heard  what  was  the  result. 

I  felt  satisfied  that  if  a  proper  investigation  had  been  made,  as  I  was  the  man  who 
discovered  the  irregularity  and  reported  it  to  the  examiner,  I  supposed  that  I  would  be 
naturally  called  upon  to  testify,  but  have  never  heard  anything  of  it  from  that  day  to 
this. 

Another  case  of  fraudulent  stencilling  was  made  in  last  August  when  I  took  charge  of 
District  No  6,  when  going  on  the  dist.  I  found  a  mat  cargo  of  mauilla  sugars;  this  cargo 
was  one  of  Elmenhorst  &  Co's.  It  was  discharged  at  merchant's  stores;  the  cargo  ag- 
gregated 65,000  mats,  comprising  5  marks.  On  going  on  the  dist.  I  discovered  this  cargo 
nearly  ready  for  sampling.  On  inquiry  from  the  U.  S.  store-keeper  as  to  where  he  had 
his  sample  and  re-sample  packages  stored  beseemed  to  be  in  ignorance  that  such  a  cargo 
was  in  his  warehouse.  1  found  out  from  the  warehouse  men  where  the  cargo  was  lodged 
in  different  warehouses.  On  reaching  the  sample  packages  I  was  certained  they  had 
been  stencilled  in  the  warehouses,  not  on  the  scales,  immediately  after  tha  weighing  was 
done:  I  reported  the  matter  to  the  assistant  appraiser's  office.  Examiner  Bowne  came 
over;  he  went  down  and  looked  at  the  cargo  and  he  felt  satisfied  that  they  had  been 
stencilled  fraudulently,  as  the  ink  was  quite  fresh.  He  told  me  to  await  further  orders. 
He  came  over  the  next  day  and  we  found  the  foreman  weigher  there,  Mr.  O'Brien,  they 
had  some  conversation,  the  nature  of  which  I  am  ignorant  of.  I  overhead  one  or  two 
phrases. 

Collector  Magone  had  been  recently  appointed  and  Mr.  O'Brien  did  not  waut  any 
trouble  at  that  time  that  would  reflect  upon  him,  and  he  wanted  Mr.  Bowne  to  make 
the  matter  as  smooth  as  possible.  We  went  with  him  and* found  the  weigher  who 
weighed  the  cargo  (McCarthy),  a  temporary  weigher.  On  showing  him  the  samples  he 
repudiated  them  and  said  those  were  not  the  samples  he  had  stencilled;  it  was  not  the 
same  ink.  Those  samples  which  were  laid  out  for  us  were  stencilled  with  lampblack 
and  kerosene;  he  showed  us  some  of  his  samples  scattered  throughout  the  cargo  on 
which  the  iuk  was  thoroughly  dry,  and  rather  indistinct.  According  to  Mr.  Bowne's 
instructions  I  took  those  samples  which  had  been  laid  out  stencilled  with  kerosene — I 
mean  the  evidently  fraudulently  stencilled  packages. 

A  new  store-keeper  had  arrived  ou  the  scene,  and  pronounced  them  as  having  been 
stencilled  in  the  store  contrary  to  regulation. 

We  took  those  samples  under  Examiner  Bowne's  orders,  whTch  represented  2\  per 
cent,  of  the  entire  cargo.  We  also  took  an  additional  5  per  cent,  of  each  mark  of  tha 
cargo.  What  the  result  was  I  have  never  heard.  I  don't  know  what  action  was  taken 
by  the  appraiser  or  the  authorities  in  the  matter.  I  have  heard  of  a  similar  affair  in 
regard  to  fraudulent  and  irregular  stencilling  of  sample  packages  in  connection  with  the 
firm  of  Messrs.  Swift  &  Co.,  sugar  importers.  I  have  heard  that  years  ago  certain  store- 
houses received  certain  sugars  solely  because  they  offered  unusual  facilities  for  sampling. 


12 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


.  When  I  find  that  samples  are  not  laid  out  mark  by  mark  I  order  the  samplers  to 
break  down  the  piles  and  identify  the  marks.  I  often  find  that  samples  of  sugar  are 
not  laid  out  mark  by  mark — boxes  and  mat  sugars. 

I  understand  that  the  merchants  can  always  obtain  samples  of  their  sugars  mark  by 
mark,  and  I  can  see  no  reason  why  sugars  should  not  be  laid  out  mark  by  mark. 

*  I  have  frequently  seen  and  protested  against  the  weighing  of  several  marks  of  cen- 
trifugal sugars  on  the  same  scale  at  thet«ame  time  to  the  weighers,  and  notified  Ex- 
aminer Bowne  with  no  apparent  results  in  the  weighing  department. 

It  is  customary  at  refineries,  as  soon  as  sample  packages  have  been  weighed  and 
marked,  for  the  samples  to  be  put  upon  trucks  and  run  within  the  refinery  premises. 
There  they  are  piled  up  promiscuously  by  the  employes  of  the  refineries  or  longshore- 
men, and  it  then  becomes  necessary  to  verify  a  great  many  tiers  of  samples,  to  see  if  the 
samples  are  put  in  mark  by  mark,  to  pull  those  piles  down,  entailing  a  great  deal  of 
work  upon  the  samplers  which  does  not  belong  to  them,  not  only  retarding  the  work 
but  giving  opportunity  to  the  mixing  of  sample  packages,  so  that  proper  samples  can  not 
be  drawn  on  account  of  the  mixing  of  high  and  low  grades. 

At  Havemyer  &  Elder's  refinery,  North  3rd  street,  there  was  a  barque  cargo  of  about 
7,000  bags  centrifugal,  six  or  seven  marks.  I  protested  against  the  weigher  weighing 
all  the  marks  together.  He  said  it  had  been  "permitted"  by  order  of  the  collector.  I 
told  him  that  it  was  a  moral  impossibility  for  him  to  return  the  correct  weights  of  each 
lot  of  sugar;  that  there  were  six  or  seven  marks  mixed  in  the  cargo,  all  of  different 
grades.  I  reported  the  matter  to  Examiner  Bowne.  He  came  over  before  the  cargo  was 
quite  complete,  just  as  we  were  ready  to  sample.  I  showed  him  the  different  grades  of 
sugar  that  were  in  it.  We  took  some  samples  that  the  weigher  had  laid  out,  some  others 
we  took  from  the  cargo,  properly  verifying  the  marks,  and  he  afterwards  reported  to  me 
that  there  was  a  difference  of  three  full  degrees. 

It  is  a  question  whether  the  Government  would  have  lost  or  the  importer.  Some  one 
would  have  lost.  I  think  that  as  near  as  I  can  recollect  the  Government  would  have 
lost,  as  a  large  proportion  of  the  sugars  were  high-grade  sugars,  and  the  classification 
would  have  been  governed  by  the  test  of  mixed  samples,  low  grade  predominating. 

Another  instance:  About  September  last,  at  the  Congress  st.  stores,  dist.  No.  5 — I  was 
running  two  districts  at  the  time-^-there  was  a  cargo  of  mat  sugar,  manillas,  ones,  twos, 
and  threes  (three  marks),  imported  by  George  Beste,  represented  by  Joseph  A.  Drey- 
foos,  sugar  broker,  this  trouble  arose  purely  from  ignorance  of  the  weigher  and  the  care- 
lessness of  the  foreman  weigher  on  the  dist.,  who  has  since  been  removed  (McElroy). 
A  temporary  weigher  had  been  started  to  weigh  the  cargo,  and  he  had  been  instructed 
to  lay  out  2\  per  cent,  of  each  mark  for  samples  and  2\  per  cent,  for  re-sample.  On  vis- 
iting the  dock  I  found  that  they  were  weighing  ones,  twos,  and  threes  on  the  same 
scales.  I  remonstrated  with  him,  but  did  not  seem  to  make  him  understand  the  neces- 
sity of  separating  them. 

He  complained  that  the  stevedores  would  not  separate  the  marks.  I  told  him  that 
his  redress  then  lay  with  the  collector's  officer,  who  would  have  the  ship  knocked  off; 
those  samples  had  not  been  w  eighed  mark  by  mark.  This  is  an  every  day  occurrence  on 
bags  and  mat  sugar.  I  reported  the  matter  personally  to  Asst.  Appraiser  Remsen,  who 
was  acting  assistant  appraiser,  and  he  told  me  I  had  better  come  down  with  him  and 
make  a  statement  of  this  to  the  appraiser,  which  I  did.  The  appraiser  told  me  not  to 
have  anything  to  do  with  those  samples.  He  sent  for  Special  Agent  Hinds;  he  came  in 
and  I  explained  the  matter  to  him  by  Mr.  McMullen's  request.  Special  Agent  Hines 
said  under  no  circumstances  must  we  take  those  samples.  Examiner  Bowne  came  in 
then.  Mr.  Hines  requested  he  (Mr.  Bowne)  and  I  to  accompany  him  to  the  customs- 
house,  which  we  did.  He  saw  Mr.  Treelor,  collector's  chief  clerk,  and  he  and  Mr.  Bowne 
then  went  in  and  seen  Deputy  Surveyor  Blatchford.  He  told  us  that  he  would  send  the 
chief  weigher,  Mr.  O'Brien,  over  to  the  scene  of  action  to  meet  us.  We  went  over  and 
waited  some  time,  and  he  did  not  come. 

Examiner  Bowne  was  called  back  to  the  appraiser's  store  on  some  other  business,  and 
about  half  past  two  in  the  afternoon  Mr.  O'Brien,  the  chief  weigher,  and  a  Mr.  Mus- 
grove,  who  is  employed  in  the  surveyor's  office  in  some  capacity,  sent  for  me,  upon  the 
dock,  where  the  sugar  was  being  weighed.  I  went  up  with  a  sampler,  called  Isaac  W. 
Cole,  for  the  reason  that  he  had  been  with  me  when  I  called  the  weigher's  attention  to 
the  irregularity.  We  went  up,  Mr.  O'Brien  and  Mr.  McElroy.  The  foreman  weigher 
contended  then  that  the  cargo  had  been  weighed  mark  by  mark,  but  they  could  not  ac- 
count for  the  entire  number  of  samples  being  laid  out  after  the  ship  being  working  three 
days,  clearly  showing  carelessness  on  the  part  of  a  foreman  weigher  of  the  dist.  Those 
samples  were  rejected  and  the  cargo  was  sampled  from  the  cargo  five  per  cent,  of  each 
mark  being  taken.   Thus  the  revenue  and  the  Government  were  protected  by  my  action. 

I  allow  samplers  under  my  charge  to  use  a  moist  sponge,  such  a  sponge  that  you  can 
not  squeeze  any  water  from.  The  immoderate  use  of  water  will  lower  the  test  of  sugar, 
and  I  pay  particular  attention  that  samplers  under  my  charge  do  not  use  a  wet  sponge. 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE.  13 

I  was  shown  some  sugar  by  Mr.  Bowne  which  had  been  taken  from  No.  5  dist.  last  fall, 
which  had  dissolved  and  re- crystal i zed  in  the  can.  I  stated  openly  that  I  did  not  believe 
that  this  sample  had  ever  left  the  dist.  in  that  condition.    It  occurred  on  Examiner 

 dist.    Leinback  and  O'Dounell  were  the  samplers.    The  condition  of  the  sugar 

indicated  to  me  that  excessive  water  had  been  used  after  the  samples  left  the  sampler's 
hands.  This  excessive  use  of  water  might  have  been  made  by  the  sampler,  but  in  my 
opinion  I  don't  think  it  was;  therefore  it  must  have  been  done  after  the  samples  left  the 
sampler's  hands,  either  while  on  their  way  to  the  appraiser's  store,  or  after  they  reached 
the  Hth  division,  or  while  in  the  closet  on  the  dock.  I  asked  Examiner  Bowne  what 
course  had  been  pursued,  fie  told  me  that  the  sugar  had  been  classified  with  what 
samples  remained  after  these  samples  had  been  rejected.  I  asked  him  what  authority 
there  was  for  doiug  that.  Why  did  he  not  report  the  matter  to  the  appraiser  and  call  a 
re-sample?    That  would  have  been  the  course  that  I  would  have  pursued. 

That  question  was  not  answered  by  him,  aurt  he  seemed  to  pay  no  attention  to  it. 
Subsequently  he  took  those  samples  to  examiners  and  samplers  on  the  wharves  and 
showed  them  to  them,  and  stated  that  if  that  occurred  again  he  would  report  thern  to 
the  appraiser,  but  as  a  matter  of  fact  he  did  not  order  or  see  that  a  re-sample  was  made 
of  this  indentical  cargo.  I  have  heard  nothing  of  the  matter  since  that  date.  The 
proper  thing  for  Examiner  Bowne  to  have  done  in  this  case,  in  my  opinion,  would  have 
been  to  report  the  matter  instantly  to  the  appraiser,  and  see  that  a  re-sample  of  the 
cargo  was  made. 

Another  instance:  Some  three  weeks  ago  I  sampled  a  cargo  605  hogsheads  of  sugar 
at  Dick  and  Myers'  sugar  refinery,  Brooklyn.  The  following  week  Examiner  Bowne 
was  over  on  the  refinery  dist.,  and  he  told  me  to  be  extra  alert  ;  that  some  of  the  men 
were  using  too  much  water;  that  there  were  three  samples  of  the  cargo,  and  they  had 
to  reject  one-third  as  being  entirely  too  wet  (this  was  since  we  had  received  orders  that 
you  were  going  to  make  this  examination  into  sugar  matters).  I  asked  him  how  did 
thev  classify  their  cargo.  He  said  on  samples  that  remained.  I  said  nothing  further. 
No  re-samples  were  made.  * 

In  the  case  of  this  man.  Sampler  Twamley,  last  fall  t  took  him  and  Sampler  Free- 
burn  to  sample  a  cargo  at  Harbeck's  stores;  three  or  four  marks  in  the  cargo;  the  cargo 
was  in  store.  I  noticed  when  we  entered  the  warehouse  that  Sampler  Twamley  was 
armed  with  a  sponge,  an  unusual  thing  for  a  sampler  to  use  with  a  knife.  He  put  the 
sponge  up  on  the  mats  for  a  moment,  and  I  felt  it  and  saw  water  dropping  out  of  it. 
He  then  said  he  would  go  back  and  sample  these  "C  "  mark,  which  was  in  the  back  of 
the  store.  I  said,  "All  right."  Mr.  Freeburn  started  right  at  the  door  to  sample  an- 
other mark,  of  which  he  had  about  170  samples  to  draw.  Twamley  got  through  in  a 
short  time;  he  came  back,  and  while  he  was  closing  up  the  can,  after  I  had  thrown  a 
ticket  into  it,  he  laid  his  sponge  aside.  I  felt  it;  it  was  perfectly  dry,  and  Mr.  Free- 
burn  looked  at  me  pretty  sharply  and  quizzically ;  I  locked  at  him;  there  was  nothing 
said.  I  gave  Mr.  Twamley  another  sample  tin  and  told  him  to  go  down  to  the  stores 
and  start  in  on  another  mark. 

I  took  this  can  of  samples  which  Twamley  had  drawn,  went  back  to  where  he  had 
drawn  them;  I  threw  it  out,  gave  the  can  to  Sampler  Freeborn  and  told  him  to  go  back 
and  draw  the  same  mats  that  Twamley  had  drawn  samples  from,  which  he  did.  I 
noticed  on  taking  up  these  samples  that  this  particular  box  containing  the  "C"  sam- 
ples drawn  by  Twamley  was  an  object  of  much  solicitude  to  him.  He  was  not  aware 
that  I  had  emptied  it  and  drawn  over  again.  I  packed  them  in  a  box  and  sent  them 
over. 

The  following  day  when  Examiner  Bowne  came  over  1  reported  this  matter  to  him, 
but  he  took  the  ground  that  as  I  had  not  retained  the  samples  as  originally  drawn  by 
Sampler  Twamley  that  I  had  not  any  case.  So  the  matter  ended,  and  nothing  further 
has  been  done  in  the  matter.  I  have  no  doubt  on  my  mind  but  what  I  practically  dis- 
covered Mr.  Twamley  in  the  act  of  manipulating  sugar  samples,  and  so  informed  Ex- 
aminer Bowne;  but,  strange  to  say,  again  no  action  was  taken.  It  was  a  cargo  of 
Charles  P.  Gardner. 

While  on  dist.  No.  2  Examiner  Bowne  would  frequently  telephone  over  from  t  hat  dist. 
to  Mr.  Remsen  at  the  appraiser's  store  asking  "could  they  melt  such  and  such  a  cargo, 
including  samples.    Was  it  all  right?" 

I  have  known  when  asked  the  question  the  answer  would  be  "All  right,  we  will 
know  about  11  o'clock."    "Then  I  will  ring  you  up  again  about  eleven  o'clock." 

About  the  time  Broker  Burt  would  get  into  the  appraiser's  store  then  the  order  would 
come  one  way  or  the  other  asking  for  a  re-sample  or  ordering  the  melting.  This  of 
course  satisfied  me  that  Examiner  Bowne  was  communicating  as  directly  as  possible 
with  Broker  Burt  through  Examiner  K'emsen.  This  has  been  of  frequent  oceurreme 
and  spoken  of  by  Examiner  Fauskitt  and  myself  many  a  time.  We  have  reported  the 
matter  to  Mr.  Tice  when  he  was  first  appointed.  That  has  not  occurred,  to  my  knowl- 
edge, since.    A  correction  of  the  evils  as  they  exist  could  not  be  effected  until  the  sum- 


14  FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 

mary  removal  of  certain  of  the  employes  of  the  8th  division  is  effected  by  Secretary  of 
the  Treasury,  and  until  the  action  of  the  assistant  appraiser  of  that  division  is  sustained 
and  the  assistant  appraiser  made  an  appraising  officer  in  fact  as  well  as  in  law. 

Broker  Drefouss  is  generally  present  while  samples  are  being  drawn  of  cargoes  that 
he  represents,  either  he  or  his  man  John  Hetherington.  John  Hetherington  is  on  friendly 
terms  with  all  of  the  samplers.  I  have  often  seen  him  chatting  with  the  samplers.  It 
often  occurs  that  the  merchant's  sampler,  as  John  Huntington  is,  samples  along  side  of 
the  U.  S.  samplers,  sometimes  before  we  reach  our  sample  packages,  but  as  I  understand 
an  order  of  the  collector  of  the  port  is  given  permitting  this. 

There  are  samplers  to-day  who  were  in  the  service  and  immediately  under  the  direc- 
tion of  Broker  Dreyfoos  when  he  (Dreyfoos)  was  supt.  of  sugar  samplers  at  the  ap- 
praiser's store,  such  as  Twamley,  McQuade,  Freeburn,  Muudy,  and  maybe  some  others. 

Samplers  carry  keys  which  will  fit  the  chests  containing  the  samples.  There  is  no 
necessity  why  samplers  should  have  keys  to  the  boxes  which  contain  the  sugar  samples; 
of  course  we  examiners  must. 

I  understand  that  samples  are  sent  from  the  wharf  to  the  appraiser's  store,  8th  div. 
on  wagons  unaccompanied  by  sworn  officers  of  the  appraiser's  store.  It  used  to  be  the 
rule  at  the  refinery  districts.  The  son  of  James  Maloney,  the  sampler,  drove  the  wagon 
and  had  charge  of  the  samples  in  transit. 

When  I  went  to  the  refinery  dist.  as  examiner  I  protested  against  this  practice  and 
made  it  a  point  to  see  that  a  sampler  accompanied  the  wagon.  I  reported  this  fact  to 
Examiner  Bowne,  and  he  said  I  was  perfectly  right,  that  he  did  not  want  that  wagon 
to  be  without  a  sworn  officer  on  it.  No  order  was  ever  issued  by  the  appraiser  or  asst. 
appraiser  relative  to  this  matter. 

A  day  or  two  after  the  appraiser  (Mr.  McMullen)  had  taken  the  detailing  of  samplers 
out  of  the  hands  of  the  asst.  appraiser,  Appraiser  McMullen  sent  for  Samplers  Seymour, 
McDermott,  and  myself.  I  went  to  see  him;  he  invited  me  into  his  inner  office,  called 
in  the  stenographer,"  told  me  to  sit  down.  He  invited  me  to  read  a  letter  which  he 
handed  me.  I  looked  at  it.  It  was  two  sheets  of  paper  signed  "  Importer;  "  an  anony- 
mous communication.  I  asked  him  was  he  aware  of  the  fact  that  it  was  an  anonymous 
letter  before  Tread  it.  He  said  yes,  but  he  wanted  it  explained.  I  then  told  him  that 
it  was  a  voluminous  communication;  did  he  want  me  to  take  it  up  by  sections  or  as  a 
whole? 

He  told  me  I  could  take  it  up  as  I  pleased;  so  I  proceeded  to  read  the  letter.  The 
tenor  of  it  was  that  the  writer  had  been  watching  with  a  great  deal  of  satisfaction  the 
great  amount  of  excellent  work  that  had  been  done,  by  the  sugar  division  since  he  (the 
appraiser)  had  become  appraiser  at  the  port,  and  that  everything  had  been  going  on  very 
smoothly  and  honestly,  but  that  within  the  past  few  months  the  writer  deplored  the 
face  that  an  element  had  crept  into  the  division  that  was  rather  demoralizing.  This 
element  consisted  of  myself  and  Samplers  McDermott  and  Seymour.  I  said  to  him  that 
I  would  take  it  up  by  sections,  and  asked  him  what  was  meant  by  the  demoralization;  he 
said, ' '  That  is  what  I  want  you  to  explain. ' '  I  said  that  I  had  not  been  in  from  the  outer 
districts  for  several  months.  I  said  possibly  I  may  have  given  offense  to  some  of  the 
men  by  rejoicing  that  we  had  a  new  asst.  appraiser. 

The  next  clause  of  the  letter  was  that  I  was  conducting  myself  on  the  dock  in  a  very 
obnoxious  manner  to  the  G.  A.  R.,  and  that  I  had  spoken  of  that  body  in  a  disrespectful 
manner.  However,  I  said  I  will  plead  guilty  to  having  done  that,  but  I  fail  to  remember 
ever  having  expressed  myself  to  any  person  in  the  department.  The  next  charge  was 
of  having  used  most  disrespectful  language  of  the  late  Presidents,  Garfield  and  Grant  . 
I  answered  that  as  I  answered  the  last.  I  failed  to  remember  ever  having  publicly  ex- 
pressed myself  to  any  man  in  the  department  about  those  Presidents,  but  I  said  I  will 
plead  guilty  to  that,  because  I  had  not  a  very  exalted  opinion  of  either  of  those  men. 

The  next  charge  was  that  I  was  a  man  of  very  dissipated  habits,  that  I  was  scarcely 
ever  to  be  found  on  my  dist.,  and  that  I  drank  very  heavily;  in  fact  was  a  confirmed 
drunkard.  I  told  him  that  the  best  answer  to  that  was  to  ask  him  to  look  at  me,  and 
ask  himself  if  he  saw  traces  of  excessive  dissipation;  you  know  my  friends  in  Brook- 
lyn and  my  reputation  outside  of  this  place.  He  said  that  he  did  not  understand  the 
matter  at  all.  I  asked  him  why  he  did  not  confront  me  with  those  people  who  com- 
plained to  him  about  me.  He  told  me  that  among  other  things  he  had  been  informed 
that  I  had  threatened  publicly  to  put  the  machinery  in  motion  over  there  in  King's 
Co.  and  have  him  removed. 

I  said  to  him  that  I  was  happy  to  know  that  he  thought  me  a  person  of  such  impor- 
tance. I  have  no  pretensions  in  that  direction  at  all.  He  wound  up  by  saying  that  we 
would  start  afresh,  advised  me  to  avoid  talking  politics;  that  was  the  end  of  it,  and  as 
a  matter  of  fact  that  was  the  only  time  I  ever  was  called  before  the  appraiser  and  ques- 
tioned by  him  relative  to  the  business  in  which  I  was  engaged. 

I  feel  satisfied  that  the  authors  of  this  anonymous  communication,  and  it  is  generally 
understood  among  the  samplers  ef  this  division,  emanated  from  employes  of  that  division. 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


15 


I  have  heard  that  it  was  a  rule  in  the  past  for  sugar  men  to  pay  money  to  United  States 
samplers  and  examiners  with  the  view  to  influence  their  work  favorably  toward  them, 
but  I  have  no  knowledge  of  this  having  been  done  recently.  I  understood  that  they 
were  paid  by  the  cat  go.  It  varied  according  to  the  size  of  the  cargo.  I  don't  know  what 
the  price  is  paid  now;  that  is  a  thing  that  is  impossible  to  discover. 

I  have  no  doubt  whatever  in  my  mind  but  that  large  sums  of  money  are  paid  annu- 
ally to  samplers  and  examiners  and  other  employes  of  the  8th  div.  to  manipulate  sugars 
to  secure  low  tests  in  the  interests  of  sugar  brokers,  but  I  think  this  is  a  pretty  difficult 
matter  to  substantiate. 

From  my  knowledge  of  the  feeling  among  the  business  men  in  the  sugar  trade,  the 
way  they  speak,  I  have  heard  several  of  them  speak  of  the  approaching  or  pending  inves- 
tigation and  saying,  "  Well,  if  there  is  anything  it  will  never  come  out,"  "There  have 
been  several  investigations  in  the  sugar  division  and  they  amounted  to  nothing,  and  this 
will  end  the  same  way,  and  if  there  are  any  frauds  the  influence  at  work  is  sufficient  to 
beat  the  results  of  this  investigation  when  it  gets  to  headquarters  at  the  Treasury  De- 
partment." 

The  impression  prevails  and  is  current  among  the  examiners  and  samplers  here  and 
among  many  of  the  merchants  whom  I  have  heard  speaking  of  the  investigation  that  it 
has  been  instigated  by  discontented  sugar  importers  at  Boston  who  felt  aggrieved  on  ac- 
count of  the  low  classifications  at  this  port. 

Late  Sampler  Seymour  has  told  me  that  if  the  proper  authority  ordered  him  to  tell  all 
he  knew  that  he  would  like  to  have  the  opportunity;  but  that  he  felt  there  was  no  use 
in  saying  anything. 

I  feel  that  this  investigation  will  not  amount  to  anything,  and  that  it  will  cost  me  my 
official  head. 

I  believe  that  hogsheads  of  sugar  for  sampling  should  never  be  placed  upon  the  wharf 
or  in  the  refineries  two  tiers  high,  for  the  reason  that  it  is  impossible  to  draw  a  correct 
sample  therefrom.  It  often  occurs  that  hogsheads  containing  samples  of  sugar  have  been 
sampled  by  merchant  samplers  before  our  samplers  reached  them. 

Some  time  ago  when  I  was  on  this  district,  the  sugar-room  being  my  headquarters,  I 
endeavored  to  ascertain  by  what  means  the  laboratory  officers  were  informed  as  to  the 
identity  of  the  sugar  samples  of  Havemeyer  &  Elder's  or  other  clients  of  Broker  Burts; 
after  a  long  time  of  continuous  and  careful  watching  I  discovered  the  fact  that  large  car- 
goes of  high  grade  centrifugal  sugars  which  would  naturally  require  low  testing  would 
be  sent  to  the  laboratory  in  large  square  cans,  being  different  in  size  and  shape  to  the 
ordinary  cans  used  for  sending  samples  to  the  laboratory. 

I  feel  satisfied  that  some  such  method  is  and  has  been  employed  whereby  the  sugars 
represented  by  Broker  Burt  received  special  treatment. 

I  reported  this  to  Assistant  Appraiser  Tice  when  he  came  into  office,  and  he  spoke 
to  them  about  it  in  the  sugar-room,  and  the  habit  was  discontinued  since  then.  I  have 
been  unable  to  discover  the  signal,  but  feel  mor  illy  certain  that  there  is  one  employed. 
Sugars  coming  in  from  the  refinery  districts  previous  to  Mr.  Tice's  appointment  always 
received  the  first  attention;  that  is,  sugar  from  Havemeyer  &  Elder's  or  any  of  Burt's 
sugars  were  sent  down  to  the  laboratory  first  and  given  the  preference  over  sugnrs  which 
had  been  received  earlier  in  the  day,  and  perhaps  the  day  before. 

I  know  of  cases  where  sugars  of*  other  importers,  sampled  and  sent  in  on  Friday,  no 
report  being  made  on  Saturday,  and  sugars  from  Havemeyer  &  Elder,  reed,  on  Mon- 
day, would  be  treated  and  be  reported  upou  before  the  other  sugars  had  been  sent  to 
the  laboratory,  so  that  I  know  whereof  1  speak,  and  only  a  blind  man  would  fail  to  see 
it,  that  Broker  Burt  practically  runs  the  Hth  division. 

Last  summer,  about  the  time  of  the  fraudulent  stencil-plate  matter  connected  with 
Elmanhaust  &  Co. ,  referred  to  at  merchants  stores,  as  we  got  through  sampling  the  wagon 
was  waiting  for  us,  and  going  over  to  the  sample  closet  to  get  a  wooden  case  to  pack 
those  tins  in,  I  noticed  an  old  piece  of  tarpaulin  in  the  way.  I  grabbed  hold  of  it  and 
threw  it  out  of  the  way.  This  man  Kelly,  the  driver  of  the  sample  wagon,  was  stand- 
ing there,  and  to  my  astonishment  there  was  a  key  of  this  closet,  but  it  would  not  fit 
all  the  closets  of  the  district.  I  took  it  up,  showed  it  to  Mr.  Kelly,  asked  him  could  he 
account  for  that.  He  said  no;  somebody  must  have  dropped  it.  I  said  there  are  only 
two  keys  supposed  to  be  on  this  dist.  '  Here  they  are,  and  this  is  a  third  one.  I  re- 
ported the  matter  to  Examiner  Bowne.  He  then  issued  an  order  that  afterwards  on 
leaving  a  dist  the  examiner  must  take  a  receipt  from  the  examiner  succeeding  him  for 
the  keys  that  he  leaves  with  him. 

I  have  heard  of  the  key  of  dist  No.  5  being  lost,  and  on  making  inquiry  found  that  it 
had  been  lost  overboard  by  Sampler  Twamley. 

After  I  left  that  Dist.  1  went  up  on  No.  5.    There  was  a  cargo  of  mixed  mnscova- 

does  that  had  been  sampled  by  ;  it  had  been  stored  in  the  Congress  street 

closet  overnight.  The  cargo  was  principally  barrels.  I  sent  the  two  samplers  on  the 
Dist,  up  to  get  boxes  out  of  the  closet  to  go  to  work  on  another  cargo.  Sampler 


16 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


McQuade  came  back  and  reported  to  rae  that  the  closet  where  the  samples  are  kept  was 
broken  into.  I  went. back  with  him  and  found  that  there  was  an  old  unused  door  in 
the  back  of  the  closet  which  had  been  securely  nailed  up  six  months  previous,  because 
I  put  a  bar  across  it  myself.  The  sample  box  appeared  to  be  intact,  but  I  at  once  noti- 
fied theact'g.  assist,  app'r,  Mr.  Rensen,  of  the  fact.  I  told  him  that  I  would  draw  the 
samples  all  over  again,  which  we  did.    Since  then  I  have  heard  nothing  of  it. 

I  have  not  happened  to  be  on  the  same  dist.  with  Sampler  Twamley  within  the  last  six 
months.  Sampler  Cole  has  not,  to  my  knowledge,  been  on  any  dist.  other  than  city  dist. , 
No.  1,  refinery  dist.,  Havemyer  &  Elder's,  No.  2,  and  Congress  stores  dis't,  No.  5,  with 
one  exception,  since  I  came  into  office. 

It  has  appeared  to  me  that  Examiner  Bowne  has  certain  favorites  amongst  the  sam- 
plers. I  have  been  told  that  certain  samplers  visit  him  frequently  at  his  house,  two  or 
three  times  a  week,  and  report  to  him  how  things  are  going  on,  what  has  been  said  and 
done.  1  have  been  told  tbat  McQuade  visits  him  regularly,  and  that  Twamley  goes  to 
see  him  quite  as  often.  I  have  been  told  that  Mr.  Cole  visits  him  quite  regularly.  If 
there  is  any  money  beiug  made  by  sugar  samplers  or  examiners,  I  am  positively  certain 
that  it  is  made  on  dist.  No.  1.  or  refinery  dist.  No.  2,  Havemyer  &  Elder,  and  Con- 
gress store  Dis't  No.  5. 

As  far  as  Broker  Burt  is  concerned,  I  don't  think  the  sugar  samplers  make  any  money. 
I  think  that  money  is  given  to  higher  game;  in  other  words,  officers  at  the  appraiser's 
store,  between  the  sugar-room  and  the  laboratory. 

I  have  suspected  Broker  Dreyfoos  of  using  money  improperly,  but  I  may  be  doing  the 
man  an  injustice,  as  I  have  not  seen  any  sequence  from  circumstances  as  in  the  case  of 
Broker  Burt's  influence.  I  feel  morally  certain  that  money  is  being  used  among  some 
of  the  samplers,  and  among  those  who  are  most  likel  y  to  be  worked  are  the  old  samplers 
and  those  new  appointees,  as  for  instance,  Samplers  Gilbert  and  O'Donnell;  and  among 
the  others  previously  alluded  to  are  Samplers  McQuade,  Twamley,  Isaac  Cole,  Mundy  & 
Leimblack.  Of  the  examiners  who  I  firmly  believe  are  under  the  ''Burt  ring"  influence 
are  Wm.  D.  Davis,  Wm.  C.  Jacobs,  Robt.  E.  Bowne,  and  Abraham  Remsen. 

I  believe  that  there  has  been  suppressed  hostility  previous  to  within  this  last  month 
existing  against  Sampler  Freeburn  on  the  part  of  Examiners  Bowne.  Jacobs,  and  Davis, 
so  much  so  that  Sampler  Freeburn  and  Examiner  Davis  had  an  open  altercation  over  in 
Hoboken.  They  were  discussing  Examiner  Bowne's  authority  aud  his  reputation  as  a 
sugar  examiner.  I  was  told  that  Freeborn  made  the  statement  that  he  was  present 
when  Bowne  received  the  first  "boodle"  that  he  ever  received. 

Within  a  month  ago,  when  Freeburn  was  on  the  Havemyer  &  Elder  dist.,  I  noticed 
that  there  was  some  cordiality  between  him  and  Bowne,  and  I  believe  the  breach  was 
healed. 

About  the  spring  of  1885  the  appraiser  issued  an  order  to  all  the  employes  of  the  ap- 
praiser's department  prohibiting  them  from  visiting  the  offices  of  importers  without  his 
written  permission.  I  understand  that  it  was  the  custom  of  Examiner  Davis  to  visit 
the  office  of  Broker  Burt,  on  Pierce  st..  every  Saturday  afternoon  after  business;  for 
what  purpose  I  don't  know. 

Sampler  Luke  McDermott  has  expressed  a  willingness  to  come  before  you  and  state 
all  he  knows  in  regard  to  irregular  practices  at  this  port  as  relating  to  sugar  and  the 
conduct  of  the  officers  of  the  division. 

There  is,  in  my  opinion,  a  great  deal  of  crookedness  in  the  manner  and  method  of 
drawing,  sampling,  and  testing  damaged  sugars,  and  I  think  the  percentage  of  damage 
allowance  is  exceedingly  too  high.  These  people  cau  very  easily  deceive  a  damage  ex- 
aminer by  making  a  pile  of  sound  bags  and  facing  it  with  damaged  packages,  which  I 
believe  is  very  often  done.  In  my  opinion  every  bag  of  damaged  sugar  should  be  sam- 
pled; otherwise  the  revenue  must  suffer. 

I  have  noticed  that  the  port  of  Boston  has  a  higher  test  of  sugars  coming  from  the  same 
ports  than  New  York  as  shown  by  the  exchange's  tabulated  sheets  in  the  8th  division. 
I  have  noticed  that  the  Philadelphia  statements  used  to  run  much  higher  than  they  do 
at  present,  of  sugars  coming  from  the  same  port  as  those  entered  at  New  York. 

Examiner  Browne  has  informed  me  that  a  circular  letter  from  the  Secretary  of  the 
Treasury  has  been  promulgated,  which  authorizes  and  permits  the  re-test  of  marks  of 
cargoes  pending  the  call  of  a  re-sample  upon  the  same.  Examiner  Foskett  and  myself 
have  made  inquiries  in  regard  to  the  matter  and  have  been  told  by  Examiner  Browne  to 
this  effect. 

I  have  asked  late  Appraiser  Hay  to  show  me  the  order,  but  he  could  not  find  it  at  that 
time;  since  then  it  has  not  been  produced  to  me. 

I  have  also  asked  Mr.  Hay  by  what  authority  in  the  case  of  re-sample  of  mats  we  are 
to  sample  the  original  sample  over  again.  He  told  me  that  he  construed  supplement 
to  circular  02  of  the  regulations  of  May  22nd,  1883,  under  date  of  Apl.  15th,  1885,  to  em- 
power him  to  take  both  the  original  and  re-sample  packages  in  case  that  he  was  called 
upon  to  re-sample  the  cargo  by  the  broker,  but  I  don't  place  such  a  construction  upon 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


17 


that  circular;  thereupon  late  Assistant  Appraiser  Hay  had  an  argument  upon  that  point. 
The  result  was  that  I  Was  ordered  to  continue  the  practice  then  in  vogue. 

Examiner  Foskett  and  myself  questioned  the  propriety  of  drawing  these  original 
samples  over  again,  and  the  only  reason  that  we  could  see  for  drawing  this  quantity  of 
sugar  was  to  get  a  bulk  into  the  sugar-room.  This  accumulation  of  sugar  is  in  the  in- 
terest of  those  who  get  the  sugar  samples,  and  I  believe  there  are  certain  men  in  thesugar- 
room  and  laboratory  who  are  paid  to  take  this  interest  in  gathering  these  sugar  samples, 

I  have  known  cases  were  Broker  Burt's  sugars  have  been  sampled  and  re-sampled  and 
a  second  re-sample  drawn  when  Broker  Burt  was  dissatisfied  with  the  classification. 

I  consider  that  the  stencil  plate  and  scoring-irons  are  kept  within  the  reach  of  any 
one,  and  I  have  no  doubt  but  that  a  great  deal  of  irregularity  and  fraud  creeps  in  on  this 
account.  I  have  seen  a  sample  draft  leave  the  scales  and  one  of  the  weighers,  who  was 
deputized  by  the  weigher,  follow  these  boxes  on  trucks  away  back  into  the  store  and 
stencil  them  after  they  got  in  there. 

I  know  that  James  Dale,  messenger  to  the  sugar-room,  does  loan  money  to  employes 
of  the  8th  division. 

Article  19  of  the  regulations  is  not  carried  out,  for  sample  and  re-sample  packages  are 
not  laid  out  side  by  side  at  the  same  time,  and  the  stencilling  is  not  done  on  these  pack- 
ages at  the  same  time. 

I  think  that  sugar  brokers  should  not  be  allowed  in  the  appraiser's  building;  neither 
do  I  think  that  they  should  be  allowed  to  hold  any  communication  with  appraising 
officers,  as  I  look  at  it  these  men  would  hesitate  about  performing  their  full  duty  while 
the  influence  of  these  people  was  constantly  surrounding  them.  I  know  that  article  19 
of  the  sample  regulations  is  frequently  violated;  the  samples  are  either  laid  out  ahead 
or  they  delay  laying  them  out  until  the  cargo  is  nearly  completed,  thereby  neglecting 
to  observe  the  rotation  called  for  by  regulation. 

Weighers  have  frequently  confessed  to  me  that  they  are  unable  to  distinguish  marks, 
and  they  went  right  ahead  and  weighed  up  regardless  of  marks.  In  this  way,  say  that 
1,700  bags  "St.  Isabel  "  were  called  for  on  the  permit,  the  weighers  found  that  the  cargo 
was  sweaty  bags,  stained;  to  make  it  easy  they  would  weigh  up  1,700  bags  regardless  of 
marks  or  grade  of  sugars,  fill  up  their  book  as  though  that  was  the  weight  of  the  "St. 
Isabel  "  mark.    Such  procedure  is  often  done. 

I  have  on  several  occasions  found  that  re-sample  packages  had  been  melted  up  by  the 
refineries  before  I  could  reach  them  when  ordered  to  re-sample  the  re-sample  packages, 
violating  Article  27  of  the  regulations. 

If  collusion  was  to  be  carried  on  between  the  examiner  and  the  sampler  and  the  im- 
porter, then  he  could  draw  samples  and  order  the  rest  to  be  melted,  thus  depriving 
the  Government  of  an  opportunity  for  a  re-sample,  as  called  for  in  Article  27  of  the  reg- 
ulations. 

In  connection  with  requests  for  re- tests  and  re-samples  I  would  think  that  there  are 
many  re-tests  made  and  re-samples  called  for  other  thau  on  written  requests  of  importers. 

I  have  seen  Examiner  Bowne  take  the  record  sheet  of  tests  from  the  messenger  in  the 
laboratory,  look  at  the  tests  of  Havemyer  &  Elder's  sugar,  and  say,  "Abe"  (meaning 
Examiner  Remsen), "  that  will  have  to  be  re-sampled."  I  have  seen  him  go  to  the  tele- 
phone immediately  and  telephone  over  to  the  examiner  on  that  district  to  the  Have- 
myer &  Elder,  "  Re-sample  that  lot  of  sugar. "  Mr.  O'Donnell  was  on  this  dist.  with  me 
at  the  time  that  this  occurred;  we  spoke  about  it  going  home  at  night. 

Jno.  Stuart  McElwee, 

U.  S.  Sugar  Examiner. 

Sworn  and  subscribed  before  me  this  25th  day  of  July,  1887. 

T.  Aubry  Byrne, 

Sjwcial  Treasury  Officer. 


New  York,  July  25,  1887. 
John  S.  McElwee,  examiner,  sugar  division,  further  states: 

Mr.  Verrinder,  of  the  firm  of  Verrinder  &  Callaghan,  came  to  me  about  the  latter  part 
of  April  last,  and  stated  that  his  firm  were  not  getting  the  refuse  sugar  samples  that 
they  were  entitled  to  as  representing  certain  sugar  importers,  and  having  authority  from 
those  importers  to  get  such  refuse  sugars.  They  made  a  written  complaint  to  the  ap- 
praiser, to  which  Mr.  Dale,  when  called  upon,  stated  in  writing  they  were  getting  all 
they  were  entitled  to.  After  this  Mr.  Verrinder  told  me  he  had  given  Mr.  Jas.  Dale, 
who  has  charge  of  these  samples  in  the  sugar-room,  twenty-five  dollars  ($25)  so  that  he 
would  look  after  their  samples,  and  see  that  they  got  all  that  belonged  to  them.  Mr. 
Verrinder  admitted  that  after  this  payment  of  money  to  Mr.  Dale  there  was  some  im- 
provement in  the  quantity  of  sugar  delivered  them,  but  that  they  were  still  not  getting 

S.  Ex.  123  2 


18 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


what  they  were  entitled  to.  Mr.  Verrinder  also  made  this  statement  to  Ass't  Appraiser 
Tice,  at  his  house,  in  my  presence. 

On  the  11th  and  12th  of  July  current,  Samplers  Mundy,  Leimbach,  and  Kelly,  under 
my  direction,  sampled  the  cargo  of  the  barque  Sernano  from  Barbadoes,  Leacralt  &  Co., 
Jas.  Burt,  broker,  at  the  Havemyer  &  Elder  Refinery.  These  samples  were  tested  on 
the  13th,  the  classification  was  published  on  the  sheets  on  the  22d  of  July,  ten  days  after 
the  samples  were  drawn.  In  this  interim  many  re-tests  of  the  marks  were  made,  and 
also  a  re-sample,  no  written  r  quest  for  the  latter  being  made,  as  I  understand. 

Havemyer  &  Elder  import  and  receive  at  their  refinery  the  highest  grades  of  sugars 
imported  at  this  port. 

Jno.  Stuart  McElwee. 

Sworn  and  subscribed  to  before  me  this  26th  day  of  July,  A.  D.  1887. 

T.  Aubry  Byrne, 

Special  Treasury  Officer. 


Exhibit  101£. 

Port  of  New  York, 
Appraiser's  Office,  July  21st,  1887. 

Mr.  T.  A.  Byrne: 

Dear  Sir:  At  your  request  I  hereby  specify  the  various  sections  of  the  Treasury 
Regulations  (for  the  sampling  and  classification  of  imported  sugars,  under  act  of  March 
3,  '83)  which  are  frequently  ignored,  viz,  sections  8,  11,  14,  15,  19,  &  28. 
Very  respectfully, 

J.  S.  McElwee, 
U.  S.  Sugar  Examiner. 


Mr.  T.  Aubrey  Byrne, 

Special  Officer  U.  S.  Treasury  Dept.: 

Dear  Sir:  At  your  request  I  itemize  herewith  the  sections  of  the  regulations  govern- 
ing the  sampling  of  sugars  which  are  imperfectly  complied  with  or  entirely  ignored  at 
this  port.  I  also  give  you  as  near  as  possible  an  explanation  of  ho\v  and  why  these  sec- 
tions are  comparatively  a  dead  letter.  I  will  begin  with  section  1st:  "The  mixing  and 
preparation  of  samples  in  the  examination  room  "  is  not  done  with  dispatch,  as  frequently 
sample  chests  containing  samples  of  various  marks  are  not  mixed  until  the  following  Mon- 
day. This  could  be  remedied  by  forbidding  the  drawing  of  samples  after  11  a.  m.  on  Sat- 
urdays or  days  preceding  a  holiday. 

Section  2.  The  sample  pkgs.  of  sugar  in  wood  the  scoring  is  frequently  neglected  or 
imperfectly  done  by  the  carelessness  of  the  Government  weigher. 

Section  3.  Sample  packages  are  frequently  laid  out  by  the  weigher,  sufficient  room  to 
properly  sample  not  being  allowed.  In  the  case  of  sugar  in  bbls.  they  rarely  place  them 
in  tiers,  but  leave  them  standing  in  a  miscellaneous  group  on  their  heads  or  bottoms. 

Section  4.  On  the  refinery  district  the  weigher  and  inspectors  do  not  take  any  interest 
in  samples  beyond  marking  them  as  such;  the  refinery  hands  tier  them  where  it  is  most 
convenient  for  themselves  at  the  time,  generally  placing  hhds.  2  tier  high,  in  which 
position  it  is  almost  impossible  to  draw  a  proper  sample,  especially  in  Martinique  sugars 
or  concrete. 

Section  7.  As  far  as  it  relates  to,  "if  25  per  cent,  and  not  over  50  per  cent,  of  any 
mark  be  damaged,  50  per  cent,  of  sound  shall  be  sampled,"  is  impracticable;  25  per 
cent,  of  the  sound  and  all  the  damaged  pkgs.  should,  in  my  opinion,  be  taken. 

Section  8.  In  all  cases  of  re-sampling  of  wooden  pkgs.  the  custom  is  to  take  the  entire 
mark.  The  regulation  says  "every  pkg.  not  before  sampled,"  which  I  believe  means 
the  remaining  75  per  cent,  not  originally  sampled.  In  the  case  of  bags  and  mats  the 
practice  is  to  not  only  take  the  re-sample  pkgs.,  but  also  the  original  samples  over  again, 
which  procedure  seems  ridiculous,  as  the  retained  sample  is  held  in  the  sugar-room 
showing  the  grade  of  the  original  pkgs.  This  practice  not  only  adds  to  the  work  of  the 
Dept.,  but  also  entails  serious  loss  to  the  importer,  half  a  ton  of  sugar  being  often  taken 
when  there  seems  to  be  no  reasonable  object  in  taking  the  same. 

Section  9  should  read:  "Shall  be  sampled  by  putting  the  trier  directly  through  the 
center  of  the  pkge.  from  end  to  end ;  one  round  tin  sample-box  to  constitute  a  sample. " 

S<  cf ion  10.  Examiners  frequently  fail  to  send  letter  of  transmittal  as  per  form  furnished 
by  Dept.,  sending  frequently  a  rough  memorandum  difficult  to  understand. 

Section  11.  This  has  not  been  observed  for  four  or  five  years  by  instruction  of  late 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


19 


Asst.  Appraiser  Hay.  It  is  a  useless  proceeding  and  should  be  stricken  out  of  the 
regulations. 

Section  13.  Inspectors  atid  weighers  frequently  do  not  take  proper  care  to  separate 
marks  of  bag  and  mat  sugars.  When  they  do  separate  them  they  confine  such  separa- 
tion to  the  sample  pkgs.,  weighing,  as  they  do,  several  marks  on  the  same  scale  at  the 
same  time.  This  can  be  understood.  The  reason  of  their  inability  to  distinguish  marks 
is  only  too  frequently  a  desire  to  oblige  the  stevedore  discharging  the  cargo,  who  is  natu- 
rally anxious  to  get  the  vessel  discharged  as  quickly  as  possible. 

Section  14.  This  section  is  very  often  ignored;  weighers  will  either  lay  out  samples 
ahead  or  delay  putting  them  out  as  long  as  possible;  in  the  latter  case  it  is  greatly  to 
the  disadvantage  of  the  Dept.  This  is  doue  either  through  careless  ignorance  or 
through  collusion  with  importers.  No  better  way  of  getting  a  fair  sample  could  be  de- 
vised did  the  weigher  always  follow  the  regular  rotation,  but  he  does  not  always  do  it. 

Section  15.  Bag  and  mat  samples  are  thrown  into  a  general  heap  on  the  refinery  dis- 
trict and  sorted  out  after  the  cargo  has  been  weighed  by  refinery  hands.  In  the  ware- 
houses along  the  rest  of  the  water  front  they  do  not  keep  the  samples,  especially  of  Bra- 
zil sugars,  separate  from  the  cargo,  but  pile  them  up  as  a  facing,  sometimes  ten  bags 
Iiigh.  The  stencilling  is  not  readily  seen,  and  in  many  cases  the  pkgs.  are  not  acces- 
sible. 

Section  19.  The  boring  and  cutting  of  sample  pkgs.  by  the  merchant  samplers  before 
the  Government  samples  have  been  taken  is  done  very  frequently.  This  is  through  the 
carelessness  of  inspectors  or  store-keepers. 

Section  22.  Molasses  samples  are  never  placed  in  the  wooden  sample-chests — it  would, 
be  impracticable  to  send  one  small  tin  can  holding  molasses  in  a  large  wooden  box.  Tin 
sample-cans  of  one  quart  capacity,  to  be  locked,  should  be  provided. 

Section  26.  The  proper  care  and  circumspection  is  not  used  by  inspectors,  weighers, 
and  store-keepers  in  selecting,  marking,  and  preserving  the  identity  of  sample  pkgs. 

Section  28.  On  the  refinery  districtsample  pkgs.  are  generally  removed  immediately  on 
being  sampled  this  is  done  to  secure  needed  room  and  is  allowed  by  inspectors  and  store- 
keepers. 

Section  29.  Better  facilities  should  exist  for  transmitting  samples  from  docks  to  the 
examination  room.  Two  wagons  now  perform  the  work,  a  third  wagon  is  necessary  from 
October  to  August  in  each  year,  and  no  samples  should  be  allowed  to  remain  over  night 
in  the  closets  on  the  docks. 

Sections  not  included  in  the  foregoing  are  generally  observed  sugars,  which  are  light- 
ered to  a  distant  refiuery  or  warehouse  as  soon  as  weighed, should  be  compelled  to  leave 
the  sample  and  re-sample  pkgs.  until  the  expiration  of  re-sampling  time,  as  there  is 
every  facility  for  the  making  of  spurious  re-sample  pkgs.  or  of  wetting  the  re-samples  by 
the  lightermen  while  in  transit.  All  sugars  should  be  only  re-sampled  where  originally 
weighed;  permission  to  re-sample  elsewhere  opens  the  way  to  fraud. 


CLASSIFICATION. 

Section  30.  Observed. 

Section  31.  Sugars  above  13  D.  S.  are  frequently  passed  by  one  examiner  instead  of 
two.  In  case  of  re-sample  the  retained  sample  is  never  used,  since  the  original  samples 
are  all  drawn  over  again,  which  in  my  opinion  is  contrary  to  regulations  and  unneces- 
sary. 

Section  32.  This  section  is  totally  ignored  to  the  best  of  my  belief.  I  have  never  known 
of  its  being  done.  I  consider  it  a  useless  regulation^  no  good  to  be  obtained  from  its  prac- 
tice. 

Section  34.  Observed. 
Section  35.  Observed. 

Section  36.  A  divergence  rendering  a  4th  and  even  an  8th  test  necessary  often  occurs. 

Section  37.  See  reply  to  section  31. 

Section  38.  Observed. 

Section  39.  Observed. 

Section  40.  Observed. 

Section  40.  Observed. 

Section  41.  Observed. 

Section  42.  Observed. 

DAMAGE. 


Section  43.  Damage  examiner  rarely  sees  the  vessel  which  has  discharged  the  sugar 
upon  which  damage  is  claimed;  neither  does  he  see  the  cargo  discharging. 

Section  44.  The  damage  examiner  only  samples  the  lots  laid  out  as  damaged,  the  test 
of  the  sound  having  been  already  ascertained  by  the  sugar  examiner.  Only  a  part  of 
the  damaged  lot  is  sampled  by  the  damage  examiner.    In  my  judgment  he  should  ex- 


20 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


amine  each  and  every  pkge.  upon  which  such  claim  is  made  and  the  amount  of  damage 
is  much  smaller  than  as  represented. 

Section  45.  Observed. 

Section  46.  Observed. 

Section  47.  Observed. 

Section  48.  Observed. 

Section  49.  Observed. 

Section  50.  I  have  never  seen  tabulated  statement  of  the  classification  of  sugars  with 
damage  allowance  attached.  In  fact,  that  is  a  matter  that  is  kept  mysteriously  by  it- 
self somewhere,  I  know  not;  that  it  is  ultimately  checked  off  on  the  invoice  I  have  no 
doubt.  All  re-samples  should  be  noted  on  the  tabulated  classification  sheets;  they  hardly 
ever  are  so  noted. 

You  will  perceive  from  the  foregoing  that  the  regulations  which  should  govern  our 
every  act  in  connection  w7ith  the  classification  and  sampling  of  sugars  is  more  "  honored 
in  the  breach  than  in  the  observance. "  In  the  matter  of  re-tests  the  astonishing  feature 
presents  itself  of  sugars  which  have  been  lying  as  a  retained  sample  24  often  48  hours, 
and  which  should,  according  to  physical  laws,  test  higher  than  when  first  tested,  in 
consequence  of  evaporation,  nine  times  out  often  the  re-test  makes  matters  satisfactory 
to  the  importers — the  test  comes  dowu. 

I  do  not  recognize  re-testing  sugars  as  legal,  never  having  seen  any  order  from  the 
Secretary  of  the  Treasury  Dept.  making  it  so.  At  the  same  time  the  original  number 
of  tests  might  be  increased  to  the  Government's  advantage  in  the  mixing  of  sugars. 
This  has  been  done  for  years  by  one  examiner.  No  one  man  should  continuously  mix 
sugars  in  the  examination-room  any  more  than  any  one  sampler  should  sample  on  any  one 
district  more  than  a  month  at  a  time.  This  same  examiner  marks  the  classification  on 
each  and  every  invoice.  This  should  be  done  by  the  clerk  who  keeps  the  tests-book 
under  the  direct  supervision  of  the  assistant  appraiser  of  the  sugar  division.  Men  who 
are  not  regularly  appointed  sugar-samplers  should  not  be  detailed  to  sample  sugar,  and 
the  assistant  appraiser  should  have  entire  charge  of  the  disposition  of  the  men  in  his 
division  in  order  that  he  may  be  held  personally  responsible  for  the  result  of  the  same. 
Yours,  respectfully, 

J.  S.  McElwee, 
U.  S.  Sugar  Examiner. 


Exhibit  102. 

June  28th,  1887. 

Abraham  G.  Remsen,  sugar  examiner  8th  division. 

Beinc  duly  sworn,  requested  before  going  further  with  his  testimony  that  he  be  given  op- 
portunity to  look  over  and  revise  his  statement. 

Admits  and  says  that  there  is  a  feeling  of  animosity  towards  the  investigators,  although 
all  employes  of  the  8th  division  are  aware  that  the  investigation  is  made  by  order  of  the 
Secretary,  and  were  so  notified  by  the  appraiser  in  an  official  letter  to  the  assistant  ap- 
praiser of  the  8th  division. 

I  saw  Dr.  Sherer  and  had  a  conversation  with  him  on  the  subject  of  this  investigation 
previous  to  being  summoned  here.  He  came  into  the  sugar-room  of  our  division  and 
spoke  about  having  a  stenographer  take  notes  of  my  testimony,  as  that  was  what  he  was 
goiijg  to  do.  Examiner  Browne,  supt.  of  examiners  and  samplers,  was  present,  who  I 
understood  to  say  would  also  demand  notes  of  his  testimony.  Mr.  Thos.  D.  Johnson, 
clerk  ol  the  sugar-room  was  also  present. 

The  statement  of  Dr.  Sherer  that  he  would  demand  notes  undoubtedly  influenced  those 
to  whom  the  statement  was  made.  Similar  conversations  were  had  by  me  with  Mr. 
James  Dale,  Chas.  H.  Trainer,  Appraiser  Tice,  and  Mr.  Abbott. 

The  employes  or  chemists  of  the  laboratory  visit  the  sugar-room  occasionally. 

They  have  messengers  to  carry  official  messages  to  the  sugar-room.  They  are  Philo 
Cole,  P.  Doonan,  Jas.  Sinilay,  and  Capt.  Flowers,  or  whoever  is  acting  clerk. 

I  am  in  charge  of  the  sugar-room.  The  sugar  chemists  and  employes  who  visit  the 
sugar-room  are  Dr.  Sherer,  Mr.  Abbott,  Mr.  Landsman,  Mr.  Davis,  Mr.  Morse,  Mr.  Rig- 
ney,  Mr.  Wainwright,  Mr.  Ball,  Dr.  Baker,  and  perhaps  some  others. 

Besides  employes  of  the  appraiser's  stores  those  wTho  visit  the  sugar-room  are  Mr.  Drey- 
foos  and  Mr.  Burt.  These  gentlemen  are  sugar  brokers,  and  represent  a  large  number  of 
sugar-houses  and  refineries. 

Mr.  Brown,  representing  Moller,  Srerck  &  Co.,  Mike  Dillon,  representing  Cabal los  & 
Co.,  entered  the  sugar-room  and  presented  me  a  pass.  Mr.  Burt  has  shown  me  a  pass 
and  his  clerk  has  entered  upon  the  same  pass.  It  is  made  out  in  the  name  of  Mr.  Burt. 
They  have  occasionally  come  into  the  sugar-room  on  matters  respecting  their  importa- 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


21 


tions,  but  it  is  not  allowable,  and  I  have  ordered  them  out  many  times.  I  have  ordered 
out  Mr.  Dreyfoos  and  Mr.  Burt.  Mr.  Burt  comes  into  the  sugar-room  about  every  day. 
He  inspects  the  classifications  that  are  posted  up  in  the  ass't  app'rs  office.  I  have  seen 
Mr.  Burt  inspect  invoices  and  classification  sheets  of  other  than  those  that  he  was  broker 
for. 

'  Mr.  Burt,  Mr.  Dreyfoos,  and  other  sugar  brokers  have  rec'd  their  classifications  in 
memorandum  before  they  were  noted  on  the  invoice,  and  if  the  test  is  too  high  Mr.  Burt 
and  Mr.  Dreyfoos  write  a  request,  generally  addressed  to  theass'tapp'r,  asking  for  re-test. 
I  do  not  know  whether  such  procedure  is  in  violation  of  the  rules  or  not. 

Mr.  Burt  almost  invariably  procures  his  own  notices  of  classifications  in  person,  and 
Mr.  Dreyfoos  sends  his  messenger  or  clerk. 

Par.  50  of  the  regulations  states  that  notices  shall  be  mailed  to  importers  at  the  close 
of  business  each  day.    This  is  not  done  in  all  cases. 

Notices  are  not  mailed  to  firms  represented  by  Brokers  Dreyfoos  and  Burt  unless  they 
should  not  call  for  them,  but  as  a  rule  they  always  call  or  send.  Messrs.  Burt  and  Drey- 
foos almost  daily  ask  for  re-tests,  and  occasionally,  when  there  has  been  a  dispute  on 
the  test  of  a  certain  mark,  several  tests  have  been  asked  for  and  made. 

Sugar-brokers  Burt  and  Dreyfoos  occasionally  send  back  tests  for  verification,  but  do 
not  remember  of  their  sending  back  more  than  ouce  at  a  time,  which  requests  I  forward 
to  the  laboratory.  I  send  up  the  requests  for  re-test  by  numbers.  For  instance,  say,  I 
send  number  5  to-day;  it  may  be  requested  that  a  re- test  of  that  mark  be  made.  I  have 
its  duplicate  written  out  in  a  book  and  give  it  a  new  number.  To  re-test  No.  5,  I  say 
please  re-test  No.  5.  I  have  the  retained  sample,  which  is  given  another  number,  but  do 
not  say  anything  about  that  to  the  laboratory.  The  object  of  that  is,  so  that  there 
shall  be  no  knowledge  in  the  laboratory  aud  that  they  will  go  right  along  with  the 
test.  If  that  re-test  was  not  satisfactory  to  the  broker  they  have  in  many  instances 
called  for  further  re-tests,  which  have  been  three  re-tests  of  one  mark;  and  then  it  would 
be  very  rare  when  re-tests  would  be  asked  for  from  the  retained  sample  unless  it  was 
sugar  in  a  large  tin,  and  then  we  would  make  more  tests,  the  object  of  which  is  to  get  a. cor- 
rect test.  We  break  the  lumps  with  a  mallet.  I  thoroughly  mix  sugars  so  that  re-tests 
ought  not  to  be  required,  but  in  many  instances  they  are  asked  for  aud  granted.  When- 
ever re-tests  have  been  asked  for  they  have  b  en  invariably  granted. 

It  is  usually  a  week  after  original  test  is  made  before  the  closing  up  of  the  classifica- 
tion; in  the  mean  time  requests  are  being  made  by  the  importers  for  re- tests.  In  cases  of 
re-samples  being  taken,  a  month  might  elapse  before  the  invoice  is  returned.  The  re- 
quirements of  regulation,  Par.  50,  are  not  wholly  complied  with  as  to  the  posting  of  the 
tabular  statements  of  classification  of  sugar,  as  it  is  a  physical  impossibility,  and,  as  a  rule, 
several  days  elapse  after  the  classification  before  the  posting  is  made,  and  in  the  mean  time 
this  gives  the  brokers  opportunity  to  have  their  samples  re-tested.  I  saw  Mr.  Burt.thesugar 
broker,  yesterday  (June  28).  He  met  me  in  the  second  division  as  I  was  passing  in  and 
said  he  would  like  to  have  a  little  talk  with  me.  The  subject  of  such  conversation  was 
the  classification  of  sugars  at  this  and  the  port  of  Boston,  and  the  present  investigation 
of  the  subject  at  this  port,  remarking  as  to  the  latter  "that  it  would  amount  to  noth- 
ing." I  have  heard  expressions  used  as  to  the  "  Burt  sugar  ring."  I  have  a^o  seen  it 
in  the  newspapers.  In  the  appraiser's  store  I  have  heard  the  expression  used,  "I  sup- 
pose this  is  some  of  Burt's  sugar."  It  was  said  facetiously,  as  they  supposed  it  to  be 
such  from  the  fact  that  I  had  sent  it  down  for  test  late  that  day.  It  is  generally  under- 
stood among  employes,  particularly  in  the  8th  division,  that  there  is  what  is  called  a 
u  Burt  sugar  ring  "  at  the  appraiser's  store,  and  of  which  Mr.  Burt  is  considered  the 
head. 

There  is  a  general  feeling  among  the  employes  of  the  8th  division  that  certain  of  the 
employes  in  that  division  are  quite  friendly  to  Mr.  Burt.  Some  of  the  persons  to  whom 
that  feeling  is  attributed  are  Mr.  Bowne,  Mr.  Jacobs,  Mr.  Davis,  and  myself. 

It  has  been  intimated  to  me  that  Mr.  Burt  and  Dr.  Sherer  were  very  intimate,  and 
that  has  been  my  own  impression,  in  a  general  way,  derived  from  the  tact  of  the  ob- 
servance of  gentlemanly  consideration  between  them.  I  have  heard  Burt  scold  about 
his  tests  many  a  time.  I  think  at  times  there  has  been  a  kind  of  coolness  between 
them. 

I  have  never  received  any  information  or  complaint  that  the  firms  represented  by 
sugar  brokers  Dreyfoos  and  Burt  ever  had  undue  consideration  on  the  part  of  their 
invoices,  which  complaints  I  think  would  naturally  be  made  to  me,  as  I  am  the  exam- 
iner in  charge  of  the  division;  but  such  Complaints  should,  be  made  to  the  head  of  the 
division,  the  ass't  appraiser. 

Mr.  Tice,  the  present  ass't  appraiser,  is  a  new  man.  Mr.  Hay,  the  former  ass't 
appraiser,  was  a  very  intimate  friend  of  Mr.  Burt.  I  have  protested  at  different  times 
against  Ass't  Appraiser  Hay's  action  on  Mr.  Burt's  invoices.  In  spite  of  these  objec- 
tions Mr.  Hay  and  Mr.  Burt  had  their  swing,  and  as  the  ass't  appraiser  was  my 
superior  officer,  my  objections  were  without  avail,  and  I  might  have  favored  Mr.  Burt's 


22 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


interest  in  certain  directions  at  the  suggestion  of  Mr.  Hay.  I  have  never  written  up 
an  invoice  wrong.  I  could  not  possibly  write  up  all  invoices  myself,  and  other  exam- 
iners have  assisted  in  such  work,  as  also  Mr.  Hay,  when  he  desired  to  help  me  out. 

If  Mr.  Burt  has  had  any  invoices  written  up  wrongly  it  has  been  done  without  my 
knowledge,  and  I  do  not  know  of  any  invoices  wrongfully  written  up  and  have  never 
been  requested  to  do  such  a  thing,  and  have  no  reason  to  think  that  any  one  else  has, 
although  it  has  been  intimated  to  me  by  Mr.  Gill,  a  former  sugar  examiner,  that  such 
was  the  case.  I  did  not  report  his  statement  to  my  superior  officers,  but  talked  the  mat- 
ter over  with  him,  as  I  generally  scrutinized  the  invoices;  but  of  course  could  not  do  so 
always.  I  considered  Mr.  Gill  a  thoroughly  honest  officer,  and  he  was  so  regarded  by 
all  of  us.  He  frequently  made  complaints  relative  to  the  examination  of  sugars,  but  no 
action  was  taken  on  them  on  account  of  the  manner  in  which  they  were  made.  I  made 
mention  of  Mr.  Gill's  statements  to  Mr.  Hay  and  one  or  two  others  in  the  division,  but 
Mr.  Hay  seemed  to  be  powerless  do  much  of  anything  from  the  fact  that  we  had  a  force 
of  men  that  he  could  not  control  very  well.  I  am  also  sure  that  Mr.  Gill  made  these 
same  complaints  to  former  Special  Agent  Adams,  who  sent  for  me  once  or  twice  in  rela- 
tion to  them. 

Special  Agents  Adams  and  Ayer  were  both  made  acquainted  by  Mr.  Gill  with  the 
irregular  methods  employed  in  takingsugar  samples.  I  am  on  the  docks  but  very  little 
myself.  Mr.  Bowne  assigns  the  samplers  to  the  different  districts.  Mr.  Hay  used  to 
make  these  details,  then  I  did;  then  it  was  submitted  to  Appraiser  Ketchum.  Mr. 
Bowne,  our  examiner,  makes  these  details  at  present,  and  sometimes  asks  me  what  I 
think  of  them.  He  goes  on  the  docks  where  the  men  are.  The  assist,  appraiser  may 
have  made  these  details  once  or  twice.  When  first  appointed  he  told  me  he  intended 
going  on  the  docks  quite  often,  and  intended  making  the  assignments  of  the  samplers  to 
the  different  districts,  but  I  believe  he  has  made  such  assignments  but  once.  He  stopped 
because  a  change  had  been  made  in  his  assignments;  that  is,  Mr.  Tice  sent  another  man 
in  place  of  the  sampler  that  Mr.  Bowne  had  assigned,  and  that  led  to  a  quarrel.  Mr. 
Bowne  had  been  assigned,  I  think,  by  the  Secretary  of  the  Treasury  for  that  duty,  to 
have  general  supervision  of  all  the  work  of  the  examiners  and  samplers;  that,  I  under- 
stand, was  so  written.  I  never  saw  the  letter.  Mr.  Bowne  told  me  so,  and  it  was  sup- 
posed he  was  the  best  judge  of  where  to  assign  the  men.  He  assigns  them  generally; 
that  is,  one  good  worker  with  a  poor  worker.  Mr.  Bowne  made  out  the  assignment  of 
all  the  men;  that  was  sent  in  to  Mr.  Tice  for  his  signature,  and  he  changed  one  man. 
Mr.  Bowne  did  not  object  or  care  much  about  it,  still  it  made  a  feeling.  Mr.  Tice  gave 
right  up  to  Mr.  Bowne.  I  think  the  name  of  the  sampler  was  Mr.  Twamley,  and  he 
was  detailed  on  the  district  of  the  "Havermyer  and  Elder  "  dist.  Mr.  Bowne  objected 
to  the  change  and  the  quarrel  ensued,  and  Mr.  Tice  put  his  name  back  again  and  as- 
signed him  to  the  Havermyer  dist.,  where  he  filled  out  the  balance  of  his  time. 

Mr.  McMullen  called  Mr.  Tice's  attention  to  the  fact  that  Mr.  Bowne's  duty  was  to 
attend  to  the  assignment  of  the  men.    Mr.  Tice  came  up  stairs  and  told  me  that. 

I  think  Mr.  Burt  got  Mr.  Bowne  into  his  present  position.  I  was  appointed  by  Gen'l 
Palmer,  who  was  very  intimate  with  Mr.  Burt,  and  when  I  came  into  the  service  Mr. 
Burt  got  me  the  position  of  sampler  in  the  appraiser's  store.  Mr.  Burt  got  me  advanced 
to  an  examiner,  and  he  got  me  advanced  to  my  present  position.  I  never  said  to  Mr. 
Burt  that  an  advance  of  salary  would  be  satisfactory  to  me.  He  got  my  salary  advanced 
from  $2,200  to  $2,500  about  May  21st,  '85.  Mr.  Bowne  treats  Mr.  Burt  very  kindly,  as 
he  got  him  his  position.  Mr.  Burt  never  stated  to  me  that  he  got  Mr.  Bowne  his  posi- 
tion, but  from  his  conversation  I  presume  he  was  responsible  for  it.  I  know  that  Col. 
Hay  owed  his  original  position  (clerk)  to  Mr.  Burt,  and  that  he  got  him  in  as  examiner 
and  then  he  got  him  in  as  asst.  appr.,  and  through  Mr.  Burt's  influence  he  was  kept  in 
until  his  resignation.  I  think  Mr.  Burt  has  influence  with  the  appraiser;  I  should  sup- 
pose the  Havermeyer  and  Elder  interest  have  influence  at  the  appraiser's  store. 

At  2.20  p.  m.  to-day  (28th  inst.)  I  (Mr.  Remsen)  was  sent  for  to  the  examination 
room  by  the  appraiser  and  asked  to  state  the  leading  questions  that  were  being  put  to 
me  here.  I  told  the  appraiser  that  I  was  under  oath,  and  declined  to  give  him  any  in- 
formation. He  did  not'ask  anything  else.  I  did  not  see  any  one  else  there.  Mr.  Mc- 
Mullen knew  I  was  being  examined  here,  but  perhaps  thought  I  was  through.  The 
mess'g'r  went  to  my  room  and  was  told  I  was  down  here. 

I  told  the  appraiser  that  I  was  under  oath,  and  he  seemed  to  think  that  I  ought  not 
to  have  allowed  myself  to  be  sworn.  I  suppose  Mr.  Burt  had  a  strong  hand  in  putting 
Mr.  McMullen  into  his  present  position.  I  suppose  Mr.  Burt's  influence  put  Mr.  W.  C. 
Jacobs  into  his  present  position,  with  a  salary  of  $2,000.00.  I  t  is  generally  known  in  the 
division  that  he  has.  I  consider  Mr.  Jacobs  a  very  truthful,  honest  man.  I  suppose  it 
would  be  natural  for  him  to  be  friendly  with  Mr.  Burt. 

I  think  Mr.  Burt  put  W.  D.  Davis  in  his  position,  and  has  had  him  advanced  in  sal- 
ary from  $1,800.00  to  $2,200.00. 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


23 


I  begin  to  think  that  there  is  some  foundation  for  the  remark  that  there  is  a  "  Burt 
sugar  ring. ' ' 

I  have  heard  Mr.  Burt  ask  for  Mr.  Jacobs  to  be  put  on  No.  2  dist. — "the  Havemyer  & 
Elder  dist.    He  has  generally  had  him  where  he  wanted  him. 

From  what  I  have  seen  I  am  rather  of  the  mind  that  Mr.  Burt  aud  Mr.  Tice  have  not 
been  very  friendly.  It  is  not  generally  understood  that  Mr.  McElwee  was  Mr.  Burt's 
choice  for  asst.  appr.  I  think  I  was  his  choice.  I  do  not  know  of  his  having  presented 
my  name.    I  could  uot  fill  the  position  to  my  own  satisfaction. 

I  know  that  Mr.  Burt  felt  quite  disappointed  when  Mr.  Tice  got  the  appointment  as 
asst.  appr.,  and  the  general  impression  prevailed  to  that  effect. 

I  think  Mr.  Hay  ought  not  to  have  been  dropped,  but  there  was  a  change  of  admin- 
istration, and  he  was  not  well,  and  had  lost  all  his  energy  for  probably  a  couple  of  years 
belore;  he  was  pretty  deaf. 

Very  often  when  he  was  sick  it  affected  his  mind,  and  I  have  hardly  considered  him 
capable  of  fulfilling  his  duties.  I  know  that  a  strong  mind  ruled  him,  and  that  strong 
mind  was  Mr.  Burt's. 

Mr.  Doucy  is  snpt.  of  openers  and  packers,  and  he  is  very  intimate  with  Mr.  Dale, 
and  the  cause  of  this  is  that  they  are  old  acquaintances  and  live  near  one  another. 
They  may  have  financial  transactions.  Mr.  Dale  is  a  man  of  property  and  he  loans 
money  to  the  employes. 

I  suppose  Mr.  McMullen  retains  Mr.  Dale  in  his  present  position  through  the  influ- 
ence of  Mr.  Burt. 

I  know  Mr.  Jas.  Maloney  and  suppose  Mr.  Burt's  influence  has  kept  him  in  his  posi- 
tion. 

We  have  two  wagons;  Maloney  and  Kelly  drive  them.  I  am  pretty  certain  Maloney 
owns  his  and  Kelly  also.    I  don't  know  that  they  are  presented  to  them. 

I  was  in  the  sugar- room  on  Saturday  morning  when  you  (Mr.  Byrne)  came  in.  Mr. 
Burt  was  sitting  at  the  table  in  the  office  that  morning,  getting  his  classifications  from 
the  lists,  and  also  the  reports.    They  are  addressed  to  Havemyer  &,  Elder. 

He  takes  them  from  the  official  notice.    It  is  sent  in  for  him  to  get  when  he  omes. 

Such  favoritism  is  not  shown  to  Mr.  Burt  alone.  I  don't  think  it  is  contrary  to  the 
regulations. 

Mr.  Burt  can  look  over  the  classification  made  of  Mr.  Dreyfoos'  sugars,  but  Mr.  Drey- 
foos  can  not  look  over  the  classification  made  of  Mr.  Burt's  sugar,  for  the  reason  that 
Mr.  Burt's  were  enclosed  in  the  book  labelled  "to  be  written  up  "  while  Mr.  Dreyfoos' 
were  laid  openly  on  the  table  or  desk — Mr.  Trauiers  desk. 

I  do  not  consider  the  appraiser's  store  or  any  part  of  it  a  public  place  for  the  posting 
of  classification  notices.  If  I  had  the  direction  of  the  matter  I  would  have  them  posted 
at  the  rotunda  of  the  custom-house.  1  do  not  know  what  caused  the  change  from  the 
custom-house  to  the  appraisers.  Col.  Ayer  was  here  and  was  well  aware  of  the  fact, 
and  it  was  done  with  his  countenance.  There  can  be  no  explainable  reason,  to  my 
mind,  why  those  sugar  classifications  should  ever  have  been  posted  in  the  asst.  appr. 's 
office.  I  see  no  possible  good,  and  there  might  be  possibly  harm  in  such  posting, 
whereas  if  the  notices  were  posted  in  the  rotunda  of  the  custom-house,  and  notices 
mailed  to  importers,  as  required  by  the  regulations,  no  harm  would  be  done;  it  would  be 
fair  to  all,  and  the  Government  and  the  importers  would  be  treated  fairly.  It  would 
keep  the  brokers  out  of  the  sugar  division. 

I  know  Peter  Twamley.  I  suppose  the  influence  of  Col.  Burt  and  Mr.  McMullen  re- 
tains him  in  his  position,  and  I  spoke  a  good  word  for  him. 

The  impression  prevails,  I  think,  that  Mr.  Burt's  influence  got  Mr.  Jas.  D.  Johnston 
his  position. 

The  trade  gets  information  of  damage  allowances  by  sending  to  the  damage  deptmt. 
I  am  not  aware  that  it  is  in  direct  violation  of  the  regulations. 

Invoices  can  not  be  more  speedily  returned  to  the  custom-house,  because  it  is  too  much 
work  for  one  man  to  pass  sugar  and  write  up  invoices. 

I  think  the  work  of  the  8th  division  would  be  very  much  expedited  if  we  were  re- 
lieved of  the  annoyance  of  those  constant  visitors — the  brokers.  I  suppose  half  our  time 
is  taken  up  with  them. 

Packages  designated  and  placed  for  sampling,  under  the  sugar  sampling  regulations, 
have  been  removed  before  the  48  hours  allowed  in  par.  28. 

In  a  vague  way  I  have  heard  of  samples  being  improperly  drawn  on  the  wharf.  Mr. 
Gill  complained  to  me  about  the  excessive  water  in  the  sponges  on  the  triers.  I  think 
it  isnotsonow.  The  least  suspicion  I  have  of  the  the  sugar  being  wet  I  call  Mr.  Browne's 
attention  to  it,  and  find  out  what  district  it  comes  from.  About  a  couple  of  weeks 
ago  I  made  such  report;  it  was  in  Mr.  McElwee's  district  .  I  do  uot  know  who  the  sam- 
plers were  at  that  time. 

Mr.  McElwee's  attention  was  called  to  it  by  Mr.  Bowers— he  was  very  glad  to  have 
his  attention  called  to  it.  I  don't  think  he  found  out  the  identical  sampler  who  used 
S.  Ex.  3  ttO 


24 


FRAUDS  IN  NEW   YORK  CUSTOM-HOUSE. 


the  water.  Sponges  are  furnished  to  the  samplers,  and  they  are  warned  not  to  use  a 
wet  sponge,  and  to  keep  their  triers  clean,  but  not  to  use  excessive  water.  Wet  sponges 
were  used  away  back  in  '83.  Emery  and  oil  are  furnished  regularly  to  clean  the  triers. 
Col.  Ayer  told  me  that  we  were  to  use  wet  sponges.  I  believe  now  from  what  you  say 
that  wet  sponges  are  contrary  to  the  regulations.  1  attribute  the  use  of  the  wet  sponges 
to  Col.  Ayer.  I  have  heard  of  samples  being  substituted  for  the  United  States  sam- 
ples. I  guess  it  was  away  back  in  Gill's  time.  I  have  heard  of  duplication  of  the 
United  States  stencils.  I  have  every  reason  to  believe  that  it  was  done.  I  believe  it 
was  done  in  the  warehouses  in  Brooklyn.  To  the  best  of  my  knowledge  it  might  have 
been  Harbeck's  or  Wall  st.  Laboring  men  were  supposed  to  be  implicated  iu  it.  No 
samplers  were  removed  for  implication  in  it.  Mr.  liowne  made  all  the  investigation. 
It  was  reported  to  the  appraiser,  Mr.  McMullen.  The  only  actiou  he  could  take  was, 
to  go  to  work  and  get  correct  samples.  That  was  six  mouths  ago,  at  least.  I  have 
heard  of  the  heads  of  sugar  casks  being  changed.  Capt.  Adams  sent  for  me  once,  and  I 
sent  him  John  Farren  to  try  and  detect  it,  but  he  could  not.  I  have  no  doubt  but  what 
it  existed.    That  was  when  the  captain  was  chief  here. 

The  cause  of  the  quarrel  between  Mr.  Burt  and  Mr.  Dreyfoos  was,  that  the  former 
charged  the  latter  with  trying  to  get  his  business  from  him.  It  still  exists.  I  have  seen 
them  meet  without  speaking. 

Mr.  Dreyfoos  has  been  in  the  business  for  8  or  10  years,  but  he  has  not  always  repre- 
sented the  firm  that  he  has  now.  He  has  lost  a  lot  of  firms  lately,  Irom  being  unable  to 
keep  down  classifications.  A  broker  acquires  or  loses  business  as  he  is  successful  in 
keeping  down  tests;  and  by  these  means  business  is  built  upon  their  ability  to  keep  the 
test  down — to  get  a  low  classification.  A  broker's  business  is  practically  for  facilitating 
and  expediting  matters  at  the  appraiser's  store,  and  securing  low  tests. 

Mr.  Dreyfoos  has  recently  lost  the  firms  of  Smith  &  Shipper,  Willard  Haws  &  Co., 
and  others,  because  they  thought  the  classifications  did  not  suit.  I  think  the  tests  at 
this  port  and  Boston  have  been  conforming  a  little  closer  than  formerly. 

It  is  generally  considered  that  Boston  imports  as  good  a  grade  of  sugar  as  New  York. 
We  get  a  sugar  that  will  test  away  down  to  75  (Muscovado).  I  don't  suppose  they 
would  touch  such  sugar  in  Boston.  I  know  the  "  Courtantia  brand."  I  don't  think  I 
could  average  its  test.  I  think  it  is  down  to  95,  and  I  have  known  it  to  go  up  to  97.  I 
have  known  it  pay  duty  at  96. 

The  effect  of  taking  a  sample  from  every  package  of  sugar  imported  into  this  port 
would  entail  a  great  amount  of  cost  to  the  Government,  yet  I  tully  believe  that  the 
Government  would  save  a  great  deal  of  money  by  such  procedure,  and  that  such  sam- 
pling would  prevent  beyond  all  possible  doubt  or  question  any  palpable  frauds  in  sugar 
importations.  It  would  not  only  save  re-sampling,  bat  it  would  be  a  bona  Jide  security 
to  the  Government  and  the  importer;  and  even  il  it  cost  $500,000  a  year  money  would 
be  saved  thereby,  and  would  prevent  fraud.  I  have  no  doubt  in  my  mind  but  that 
fraud  is  being  perpetrated  upon  the  customs  revenue  in  the  importations  of  sugar,  and  I 
believe  it  from  the  fact  that  so  many  irregularities  against  the  interests  of  the  Govern- 
ment can  creep  into  the  present  method  ot  enforcing  the  present  regulations;  and  in  my 
judgment  an  entirely  new  set  of  regulations  should  be  made  tosecure  the  proper  revenue 
to  the  Government  and  prevent  fraud. 

I  make  this  statement  from  the  fact  that  I  have  been  engaged  for  18  years  in  the  sugar 
division  of  the  appraiser's  store  at  this  port,  and  owing  to  my  long  experience  and  knowl- 
edge in  the  sampling,  testing,  and  appraising  of  sugars. 

I  consider  that  the  present  sugar-sampling  regulations  offer  many  loop-holes  for  fraud 
against  the  Government.  I  consider  that  the  asst.  appr.  of  the  8th  division  should  be  a 
man  who  has  had  some  knowledge  of  sugars,  and  also  who  is  an  active  man  both  ment- 
ally and  physically,  and  have  a  constant  and  direct  supervision  of  the  whole  work  of  that 
division  outside  and  in. 

The  services  of  the  present  asst.  appr.  of  that  division  are  merely  perfunctory.  I 
think  the  officials  and  employes  of  the  8th  division  stand  in  awe  of  Mr.  Burt's  influence 
more  than  any  other  person,  either  officially  connected  or  otherwise. 

I  interred  from  the  appraiser's  remarks  that  he  censured  me  for  giving  testimony  un- 
der oath. 

He  did  not  give  me  any  advice,  suggestion,  or  instructions  as  to  any  further  testi- 
mony. 


July  7,  1887. 

On  the  day  following  my  examin  ation  by  you  Mr.  Jas.  Burt,  sugar  broker,  appeared 
in  the  office  of  the  8th  division  and  inquired  of  me  if  any  merchant  had  accused  him  of 
having  and  receiving  any  undue  consideration  at  the  appraiser's  store?  I  inferred  from 
Mr.  Burt's  remarks  to  me  that  I  had  stated  in  my  examination  that  it  was  currently 
reported  in  the  laboratory  that  the  "Burt  sugar  ring''  had  existence;  to  which  I  re- 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


25 


plied  that  I  refused  to  talk  on  the  subject,  being  under  oath,  and  thought  that  Mr.  Burt 
had  no  right  to  question  me.  I  do  not  know  how  he  obtained  any  information  as  to 
anything  testified  to  by  me.  I  know  of  no  regulation  where  specific  or  implied  permis- 
sion is  allowed  or  directed  whereby  sugar  importers  or  their  brokers  can  obtain  re- tests 
ou  their  own  application,  although  it  is  the  rule  at  the  appraiser's  store  to  make  such 
re-tests  when  requested.  Refusal  to  make  re-test  for  importers  on  their  application  has 
never  been  made  to  my  knowledge,  and  it  is  a  rule  to  grant  two  and  sometimes  three  re- 
tests  ou  their  application  after  the  original  classification  has  been  made  in  the  labora- 
tories. 

On  account  of  the  crowded  condition  of  the  work  in  my  division  it  has  simply  been  im- 
possible to  write  up  the  daily  statement  of  sugars  classified  during  the  day,  as  required 
by  regulations;  but  on  the  other  hand,  two,  three,  four,  live,  six,  or  more  days  intervene 
between  the  original  classification  of  the  sugar  and  the  noting  of  said  classification  upon 
the  tabulated  statements.  When  these  sheets  are  written  up  they  should,  and  so  far  as 
I  know,  be  correct.  When  correct  they  will  show  name  of  vessel,  importer,  where  from, 
date  of  entry,  marks,  color,  and  classification  for  duty,  as  well  as  the  number  of  packages 
per  cargo.  As  I  understand  it,  passes,  when  issued,  are  given  to  the  importer  or  then- 
representative,  entitling  them  to  visit  only  the  division  in  which  they  have  business. 
Those  are  the  only  passes  I  have  ever  seen,  and  simpty  granted  permission  to  visit  the 
desk  of  the  assistant  appraiser  of  the  division;  yet,  as  a  matter  of  fact,  sugar  brokers  and 
importers  daily  visit  the  8th  division.  In  my  opinion  Mr.  Jas.  Burt  is  the  most  frequent 
visitor,  and  next  to  him  J.  A.  Drey  loos,  or  his  clerk,  to  the  8th  division. 

One  of  the  advantages  Mr.  Burt  derives  in  following  up  his  invoices  through  the  8th 
division,  pushing  them  forward,  obtaining  early  classification,  etc.,  is  that  it  gives  his 
firms  advantages  over  others,  and  enhances  the  value  of  his  personal  services  as  a  broker 
with  the  sugar  importing  trade.  As  far  as  I  am  concerned,  I  always  endeavor  to  act  im- 
partially, but  from  the  fact  of  Mr.  Burt's  daily  presence  in  the  sugar  division,  he  does 
receive  preference  is  from  the  fact  that  he  is  there  to  request  and  demand  the  same. 

The  office  of  sugar  sampling  district  No.  2,  with  direct  telephonic  communication 
with  the  sugar-room  in  the  3th  division  at  the  appraisor's  store,  is  on  the  premises  of  the 
Havemeyer  &  Eider  Sugar  Refining  Company.  In  this  office  sometimes  sugar  samples  are 
kept  over  night.    The  sugar  triers  and  other  sampling  instruments  are  also  kept  there 

It  often  happens  that  the  examiner  on  District  No.  2  (Havemeyer  &  Elder  refinery) 
telephones  to  the  sugar-room,  8th  division,  and  obtains  information  from  myself  or  Mr. 
Bowne  that  certain  sugars  belonging  to  the  H.  &  E.  Company  have  been  tested  and  are 
all  right  and  the  tests  acceptable  to  Mr.  Burt,  their  broker,  and  that  the  samples  can  be 
melted  up.  This  release  of  samples  is  made  invariably  within  24  hours  of  the  drawing 
of  said  samples,  thus  facilitating  the  importations  of  the  Havemeyer  &  Elder  Sugar  Re- 
fining Company.  This  is  the  only  direct  Government  telephone  wire  connected  with 
any  private  refinery. 

Abraham  G.  Remsen. 

Sworn  to  and  subscribed  before  me  this  7th  day  of  July,  A.  D.  1887.  * 

T.  Aubrey  Byrne, 

SpL  Treasury  Officer. 


New  York,  July  12,  1887. 

Abraham  G.  Remsen,  examiner,  further  states: 

In  regard  to  the  matter  of  tests  and  re-tests  made  at  the  request  of  sugar  importers  and 
their  brokers,  wherein  the  re- tests  asked  for  show  a  higher  classification  than  the  original 
test,  the  importer  or  broker  invariably  claim  the  lower  test,  which  has  always  been  al- 
lowed and  so  noted  on  the  invoice,  although  there  may  be  by  thus  granting  the  low  test 
one  full  degree,  equal  to  xj*  0-  cents  per  pound  loss  to  the  Government  revenue.  This  cus- 
tom has  been  the  practice  for  years  past,  as  established  by  former  Asst.  Appraiser  Frank 
Hay. 

I  think  this  custom  of  re-testing  at  the  request  of  the  importer  a  pernicious  one  and 
should  be  abolished,  as  the  Government's  samples  and  original  tests  are  as  fair  to  the 
importer  as  to  the  Government.  Aside  from  this  fact,  it  entails  Rn  exceeding  amount  of 
extra  work,  and  in  many  instances  the  revenue  suffers  therefrom. 

I  have  repeatedly  discussed  this  matter  with  Dr.  Sheverer,  the  chemist,  who  holds  to 
the  opinion  that  the  present  practice  is  a  correct  one,  and  evincing  a  leniency  towards 
the  importer,  I  holding  that  the  original  test  should  stand,  it  having  been  correctly 
made.  Mr.  John  Sherer,  the  sugar  damage  examiner,  holds  to  the  same  opinion  as  his 
brother,  Dr.  Sherer,  the  chemist  in  charge  of  the  laboratory.  I  understand  that  Dr. 
Sherer  interprets  the  regulations  as  permitting  of  three-tenths  of  a  degree  in  theclassifi- 
cations  made  from  the  test.  This  accounts  for  the  number  of  even  degrees  noted  on  in- 
voices as  the  classification. 

If  the  tests  of  a  sugar  sample  made  in  the  laboratory  read  90.  i,  90.2,  and  90.3,  the  test 


26 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


that  I  should  note  for  classification  on  the  invoice  would  be  96. 1 ;  but  as  a  matter  of  fact 
this  does  not  occur  very  often,  because  the  tests  don't  read  as  a  rule  96.1,  96.2,  96.3,  but 
do  read  96.4,  96.5,  96.7,  and  96.8. 

When  the  tests  read  up  as  high  as  96.4  to  96.8,  the  dropping  of  x3o  does  not  affect  the 
duty,  but  when  they  read  96.1  to  96.3  it  does. 

From  my  long  experience  as  an  examiner  of  sugars,  and  in  charge  practically  of  the 
classifications,  I  am  decidedly  in  favor  of  the  total  abrogation  of  the  making  of  re- tests 
on  the  requests  of  sugar  brokers  or  importers,  thus  relieving  the  sugar  division  of  the 
constant  importunities  of  the  sugar  brokers,  and  also  saving  to  the  Government  the  pos- 
sibility of  manipulating  tests  to  the  loss  of  the  revenue,  which,  as  I  said  before  in  my 
testimony,  is  the  main  object  of  the  sugar  brokers,  evidenced  by  them  and  their  acts 
daily. 

When  Sugar  Broker  Burt  calls  in  the  asst.  appraiser's  office  for  his  tests  and  does 
not  find  them,  a  messenger  is  sent  into  the  sugar- room  for  them,  thus  interfering  with 
our  work,  and  necsssarily  creating  some  delay  in  the  legitimate  performance  of  our  duties. 
We  always  take  up  our  work  in  regular  order  and  perform  our  duties  as  rapidly  as  pos- 
sible, and  do  not  need  such  prodding  as  we  receive  from  the  brokers. 

Abraham  G.  Remsen. 

Sworn  to  and  subscribed  to  before  me  this  12  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 
Special  Treasury  Officer. 


Exhibit  103. 

New  York,  July  26,  1887. 
William  H.  Townsend,  examiner,  sugar  division,  states  as  follows: 

Was  appointed  originally  to  test  sugars  in  the  laboratory  with  a  polariscope,  at  $1,200 
per  annum,  in  1883;  entered  examination  for  promotion  and  appointed  examiner  in  the 
8th  division  in  1885  at  $1,800  per  annum. 

I  acted  at  one  time  (in  1884,  I  think)  as  damage  examiner,  in  the  absence  of  John  A. 
Sherer,  who,  I  understood,  resigned.  I  filled  this  position  about  six  weeks  and  signed 
damage  warrants  on  sugars.  I  tested  the  damage  samples  in  the  United  States  labora- 
tory. I  believe  the  custom  is  and  has  been  for  only  one  examiner  to  sigu  damage  war- 
rants for  sugars,  while  I  am  of  the  opinion  that  in  all  other  appraisements  for  damage 
the  examination  must  be  made  by  two  examiners. 

I  have  never  noticed  or  seen  anything  which  indicated  to  me  that  sugar  broker  Burt 
had  any  undue  influence  in  the  8th  division.  I  do  not  know  any  U.  S.  samplers  or  ex- 
aminers who  are  influenced  by  merchants  or  their  brokers  to  draw  samples  favorably; 
neither  do  I  know  any  method  at  present  in  vogue,  nor  any  irregularities  which  have 
transpired,  nothing  having  been  brought  to  my  attention,  and  I  am  of  the  belief  that 
the  Government  receives  all  the  revenue  it  is  entitled  to. 

I  was  cautioned  to  be  on  guard,  as  fraudulent  stencilling  was  reported  as  having  been 
done.    With  this  exception  I  know  of  no  irregularity. 

Wm.  H.  Townsend. 
Sworn  and  subscribed  to  before  me  this  26th  day  of  July,  1887. 

T.  Aubrey  Byrne, 
Special  Treasury  Officer. 


Exhibit  104. 

Dr.  Edward  Sherer,  examiner  in  charge  of  U.  S.  laboratory,  under  oath  states  as 
follows: 

Q.  You  were  appointed  to  the  service  on  what  date? — A.  On  the  10th  May,  1880,  in 
charge  of  the  U.  S.  laboratory,  then  located  at  Varrick  st. ,  and  have  been  in  charge  to 
date. 

Q.  In,  1883  did  you  assist  in  the  compilation  of  these  regulations  ? — A.  Yes;  I  did  so. 

Q.  Who  did  you  assist? — A.  The  portion  of  the  work  which  came  directly  under  my 
supervision  is  that  which  relates  to  the  testing  of  sugars,  marked  "classification"  from 
classification  down  to  the  "estimation  of  damage."  I  framed  that  portion  of  the  regu- 
lations, and  they  were  made  at  the  request  of  the  Secretary  of  the  Treasury,  conveyed 
through  the  appraiser  to  me,  and  they  were  afterwards  adopted  and  embodied  in  the 
regulations. 

Q.  Who  had  special  charge  of  the  making  up  of  the  regulations,  so  far  as  the  rest  of 


FRAUDS  IN  NEW  YOKE  CDSTOM-HOUSt:. 


27 


the  regs.  is  concerned  ?— A.  Col.  Ayer  perhaps  drafted  most  of  them,  except  the  estima- 
tion of  damages;  that  my  brother  drew  up. 

Q.  You  had  frequent  conferences  with  Special  Agent  Ayer? — A.  Yes. 

Q.  And  gave  him  the  benefit  of  your  knowledge  of  sugar? — A.  Yes,  sir. 

Q.  Who  else  was  present  assisting  and  offering  Col.  Ayer  suggestions  and  aiding  in 
the  compilation? — A.  My  brother  John  was  sometimes  present  and  assisted  him.  I 
don't  recollect  that  any  one  else  was  ever  present  and  assisted  in  the  compilation. 

Q.  Were  you  ever  present  when  Col.  James  Burt  assisted? — A.  I  was  never  present 
when  the  subject  was  discussed  and  when  Col.  Burt  was  present. 

Q.  Do  you  know  that  he  gave  assistance? — A.  1  do  not  know  that  he  gave  assistance. 

Q.  Do  you  know  of  any  one  else  who  assisted  Spl.  Agt.  Ayer  in  making  up  these  regu- 
lations?— A,  I  do  not.  If  you  allow  me,  I  will  say  in  explanation  that,  after  the  regu- 
lations were  framed  and  blocked  out,  type- written  copies  were  made,  and  I  accompanied 
Col.  Ayer,  at  the  request  of  the  appraiser  at  that  time  (Mr.  Ketch  urn),  on  a  tour  among 
the  sugar  importers.  We  visited  a  considerable  number  of  importers  and  presented  the 
draft  of  the  regulations  and  discussed  with  them  questions  which  arose  in  regard  to  them, 
and  satisfied  ourselves  of  the  general  acceptability  among  the  trade;  some  criticisms 
were  made  and  talked  over.  It  was  desired  to  have  an  expression  of  opinion  from  them 
in  regard  to  the  set  of  regulations,  which  was  something  that  had  never  been  done  be- 
fore, and  the  regulations  were  generally  acceptable  to  the  trade. 

The  only  importers  that  we  did  not  call  upon  in  that  connection  were  Havemeyer  & 
Elder  or  Col.  Burt. 

Q.  At  the  time  the  regulations  were  framed  what  was  the  reason  why  a  call  was  not 
made  on  these  people  ? — A.  It  happened  to  be  inconvenient.  Mr.  Havemyer  was,at  the 
time  we  called,  out  of  his  office,  and  to  see  him  required  more  time  than  we  could  well 
devote  to  the  matter.  We  saw  we  had  enough  to  get  practical  acceptance  of  the  work 
and  we  did  not  think  it  was  necessary  to  go  and  see  them. 

Q.  These  regulations  as  promulgated  have  been  somewhat  amended  by  subsequent 
circulars? — A.  Somewhat. 

Q.  But  as  they  stand  at  the  present  time  they  are  such  as  should  be  enforced  ? — A.  I 
regard  them  as  such. 

Q.  Do  you  know  any  of  these  regulations  that  are  to-day  disregarded  ? — A.  I  do  not. 

Q.  Do  you  know  that  the  paragraph  which  requires  the  use  of  red  plugs  in  sample 
packages  after  the  samples  are  drawn  is  not  conformed  to? — A.  I  did  not  know  it  until 
recently. 

Q.  By  whom  were  you  made  acquainted  with  the  fact? — A.  I  can  not  recall. 

(%.  Did  the  appraiser  state  it  to  you? — A.  The  appraiser  did  not  state  it  to  me. 

Q.  Did  you  know  why  Col.  Ayer  was  transferred  to  San  Francisco? — A.  No,  sir. 

Q.  You  considered  him  an  efficient  officer  at  this  port? — A.  Very  efficient. 

Q.  Was  he  a  man  skilled  particularly  in  the  matter  of  sugar? — A.  I  think  that  Col. 
Ayer  gave  more  attention  to  the  question  of  sugar  classification  than  perhaps  any  other. 

Q.  Do  you  know  of  any  of  the  paragraphs  in  these  regulations  which  should  at  the 
present  time  be  amended? — A.  I  should  not  be  prepared  to  suggest  any  amendment.  I 
am  not  prepared  to  say  that  they  could  not  be  amended. 

Q.  You  think  that  under  the  regulations  the  Government  can  obtain  all  that  it  is  en- 
titled to?— A.  I  do. 

Q.  In  this  par.  47  do  you  understand  that  that  paragraph  was  made  with  the  view  to 
have  tabulated  forms  forwarded  from  the  Department  to  the  various  sugar  ports  as  a 
guide  for  the  making  up  of  the  result  of  sound  and  damaged  samples? — A.  I  under- 
stand it  to  be  simply  an  illustration  of  the  method  that  should  be  followed  by  the  ex- 
aminer. 

Q.  What  is  your  method  of  making  returns  of  damaged  sugars  ? — A.  It  has  been  cus- 
tomary to  report  to  the  damage  examiner  the  polarization  and  percentage  of  water  and 
the  polarization  of  the  dry  substance  of  the  sample  of  the  mark  received  from  him ;  that 
has  sometimes  been  done  on  the  little  slip  of  paper  that  you  see  there.  Sometimes  a  cer- 
tificate has  been  filled  out,  a  record  of  it  being  kept  in  the  laboratory. 

Q.  Is  there  any  signature  put  to  the  laboratory  results  on  the  damage  sugar  as  re- 
ported to  the  damage  examiner? — A.  I  think  not.  There  is  a  record  on  file  there  with 
the  initial  letter  of  the  man  making  the  test. 

Q.  Why  is  not  the  same  procedure  followed  in  the  case  of  damage  certificates  as  in 
sound  tests? — A.  It  was  customary  for  a  long  time  for  the  damage  examiner  to  make 
his  own  test.  It  was  not  expected  or  contemplated  that  a  damage  sampler  should  nec- 
essarily be  examined  in  the  laboratory.  The  examiner  was  given  a  great  variety  of 
other  work,  and  he  brought  his  samples  to  the  laboratory  and  requested  that  they  be 
tested.    Of  course,  care  was  always  taken  to  keep  a  record  of  the  tests. 

Q.  Do  you  appoint  a  certain  man  to  do  damage  sugars? — A.  I  have  found  it  conveni- 
ent as  a  rule,  but  not  always.    At  present  that  work  is  done  mainly  by  Mr.  Ball;  dur- 


28 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


ing  his  absence  any  one  of  the  gentlemen  who  is  not  engaged  in  the  regular  sugar  work 
is  requested  to  do  damage. 

Q.  Is  Mr.  Ball  an  examiner? — A.  No,  he  is  not;  his  rank  is  that  of  a  sampler.  He 
does  such  sugar  work  as  any  one  of  the  examiners  and  yet  does  not  rank  as  an  examiner. 
The  work  of  the  examiners  is  on  the  invoices  in  the  sugar-room.  We  have,  at  times,  all 
ranks  engaged  in  testing  sugars;  they  were  all  practically  at  first  sugar  testers. 

Q.  Are  those  men  that  are  at  present  employed  in  the  laboratory  experts  in  the  test- 
ing of  sugar? — A.  Yes,  they  are  so  regarded. 

I,).  Are  they  men  who  have  general  knowledge  as  chemists? — A.  Not  all  of  them. 

Q.  Who  have? — A.  Some  of  them  have  had  no  special  chemical  training  except  such 
as  they  have  received  since  they  were  in  the  service.  Mr.  Crumbie  and  myself  have  had 
chemical  training.  Mr.  Abbott,  Mr.  Rigney,  Mr.  Ball,  Mr.  Landsman,  and  Mr.  Morse 
have  not  had  special  chemical  training,  though  are  practically  the  men  that  are  engaged 
on  sugars.    Mr.  Morse  does  not  read  the  tubes  in  the  instrument. 

Q.  By  reading  tubes  you  mean  ascertainment  of  the  value  of  the  sugar  solution  in  the 
polariscope? — A.  Yes. 

Q.  Is  Mr.  Abbott  a  practical  chemist? — A.  No,  sir;  he  is  a  sugar  expert. 

Q.  Is  Mr.  Abbott  a  capable  and  competent  examiner  according  to  what  is  expected  of 
him? — A.  I  so  regard  him. 

Q.  When  you  are  not  there  he  is  in  charge  of  the  sugar-room  in  the  laboratory? — A. 
Yes,  sir. 

Q.  Does  he  sometimes  sign  certificates  as  chemist  in  charge? — A.  No,  sir;  Dr.  Batter- 
shaw  is  the  chemist  in  charge  of  the  laboratory  in  my  absence. 

Q.  In  reading  solutions  of  sugar  when  two  polariscopists  are  engaged  upon  the  same 
sample,  each  testing  a  duplicate  tube,  what  is  your  method  as  you  instruct  them? — A. 
The  regulations,  of  course,  prescribe  a  method  that  is  to  be  lollowed  in  the  matter.  The 
sugars  are  weighed  off"  by  separate  men,  the  duplicate  weighing  being  made  and  the  so- 
lutions are  prepared  and  placed  in  the  tubes;  each  man  sits  at  the  instrument  and  writes 
his  own  reading  down  without  comparison.  After  the  readings  are  ended  then  it  is  cus- 
tomary for  me  to  compare  the  duplicates,  noting  where  the  difference  exceeds  three- 
tenths  of  1  per  cent.,  and  I  then  make  the  necessary  alterations  and  call  the  attention 
of  the  examiner  who  has  previously  read  the  tube.  He  always  has  the  opportunity  if  . 
he  desires  of  reading  it  again  himself.  If  the  difference  is  at  all  noticeable,  I  am  in  the 
habit  of  asking  him  to  do  it.  If  the  variance  does  not  exceed  three- tenths  of  1  per  cent, 
the  lower  of  the  two  readings  is  then  accepted  as  the  test  for  classification. 

Q.  Who  are  the  men  that  are  paired  together  as  partners  so  called? — A.  Generally  Mr. 
Abbott  and  Mr.  Landsman  read  together.  Mr.  Rigney  and  myself.  I  generally  read 
Mr.  Morse's  tubes,  and  if  I  am  there  I  always  read  them.  If  I  am  not  there  Mr.  Abbott 
does  it,  or  Mr.  Crumbie,  or  at  times  Mr.  Ball.  Mr.  Chapman  is  sometimes  called  down 
to  read  by  polariscope.    I  think  I  have  sometimes  read  his  tubes. 

Q.  Does  Mr.  Flowers  sometimes  read? — A.  It  has  been  a  long  time  since  he  has  been 
called  down  to  do  anything  of  that  kind. 

Q.  Is  there  any  one  in  the  laboratory  who  is  incompetent  to  read  of  those  gentlemen 
that  have  been  named? — A.  I  should  be  very  doubtful  in  regard  to  the  correctness  of  Mr. 
Morse's  readings,  and  should  feel  considerable  hesitation  in  trusting  to  his  readings,  un- 
less he  would  demonstrate  by  practice  that  he  could  read. 

Q.  Did  he  pass  a  civil-service  examination  on  the  reading  of  by  polariscope? — A. 
He  passed  a  civil-service  examination  which  qualified  him  to  read  sugar  by  polariscope, 
and  which  resulted  in  his  appointment  to  do  that  work. 

Q.  Did  you  submit  the  questions  on  that  examination  ? — A.  The  expert  questions  rela- 
tive to  sugar  were  framed  by  me. 

Q.  Did  you  see  his  examination  papers? — A.  I  do  not  recall  now  whether  the  report 
was  submitted  to  me  or  not. 

Q.  Is  his  eyesight  defective? — A.  That  is  a  matter  that  is  very  evident  to  himself. 
He  has  expressed  a  desire  for  me  to  read  his  tubes. 

Q.  Suppose,  for  instance,  that  a  sugar  sample  is  tested  95.8  and  the  duplicate  sample 
tested  by  the  partner  reads  96.1,  you  would  accept  the  95.8? — A.  Yes. 

Q.  Suppose  it  was  95.9  on  one  tube  and  96.2  on  the  other,  you  would  accept  the  95.9 
as  the  test  for  classification? — A.  Yes. 

Q.  Under  what  circumstances  would  you  take  atestas  the  test  for  classification  which 
was,for  instance,  95.1  ? — A.  After  carefully  re-reading  the  tube  and  assuring  myself  that 
that  was  the  reading  of  it,  and  that  very  rarely  occurs,  because  the  second  readingof  that 
tube  results  very  probably  in  putting  it  at  95.3  or  95.2  or  at  95,  the  same  tube  read  by 
the  same  observer  at  an  interval  of  ten  minutes  may  be  read  by  him  one  or  two  tenths 
from  his  first  reading.  In  going  over  our  books  you  will  very  rarely  find  T\j  of  an  even 
figure  as  the  figure  for  classification.  Sugar  testing  not  above  90  pays  two  cents,  and 
sugar  testing  90.1  would  pay  t4q°o  ct.  per  lb.  additional. 

I  should  look  at  that  tube  very  carefully  and  the  result  would  probable  be  to  make 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE 


29 


that  x30  or  90.  I  think  it  would  be  unwise  to  put  it  there — I  mean  at  90.1 — for  the 
reason  that  it  would  be  extremely  difficult  to  prove  that  to  be  the  correct  test.  We  take 
the  lower  of  two  tests  agreeing  to  within  /*„  of  one  per  cent.,  thus  eliminating  the  error 
of  observation,  as  it  is  called.  I  think  we  have  done  so;  we  thus  gave  the  benefit  of  the 
doubt  to  the  importer.  If  we  were  to  report  many  sugars  as  of  a  degree  over  the 
even  figure  the  chances  are,  as  the  importers  always  complain  that  we  are  higher  than 
they  are,  that  re  tests  will  be  asked  for.  You  will  find  a  much  larger  number  of  T2e  are 
reported  as  the  tests  for  classification. 

Q.  Do  you  often  have  to  make  re- tests  ? — A.  We  are  sometimes  asked  by  Mr.  Remsen, 
who  would  send  down  a  note  to  me  and  say:  "  Please  verify  number  so  and  so."  There 
was  a  time  when  they  were  reported  as  re- tests,  for  the  first  two  years  I  think,  but  it 
made  confusion,  and  to  distinguish  between  them  I  usually  put  verification  on  the 
ticket  and  if  it  is  a  third  test  or  retest  mark  it  re-test,  and  for  perhaps  two  years  now 
they  have  been  called  verifications. 

Q.  Do  you  have  requests  sent  up  for  a  re-test  of  a  serial  number  that  you  have  in 
your  possession? — A.  Yes,  that  we  call  verification. 

Q.  When  request  is  made  for  a  re-test  of  a  retained  sample  by  an  importer  what  au- 
thority of  law  is  there  for  granting  it? — A.  Paragraph  33,  under  "Classification. " 
What  was  had  in  mind  at  that  time  was  thataretained  sample  should  be  kept  incase  of 
accident  to  the  original  sample  or  any  question  in  the  mind  of  the  appraiser  himself; 
and  that  the  correctness  of  the  original  test  might  be  determined.  It  would  sometimes 
happen  that  a  sugar  might  be  imperfectly  mixed  and  the  portion  under  the  original 
number  may  differ  from  the  portion  retained,  and  the  merchant  or  importer  coming  to 
the  sugar-room  and  complaining,  and  showing  evidence  of  a  lower  test  of  that  sugar,  it 
would  be  in  the  option  of  the  appraiser  (asst.  )  or  examiner  in  charge  to  verify  the 
original  test,  and  finding  that  correct  to  then  send  down  the  retained  sample  with  an- 
other number  and  see  if  that  gave  the  same  result;  then  if  it  did  not,  ask  for  the  verifi- 
cation of  that  that  was  in  the  minds  of  those  who  framed  the  regulation. 

Q.  You  know  as  a  fact  that  when  importers  and  brokers  come  and  ask  for  a  re- test  they 
do  not  submit  their  statement  of  facts  ? — A.  I  do  not  know.  I  have  nothing  to  do  with 
the  matter  of  franking  verifications.  Inasmuch  as  disputes  might  arise  I  would  have  no 
hesitation  in  saying  that  to  my  mind  the  broker  or  importer  before  being  granted  any 
re-test  ought  to  submit  the  facts  that  sustain  the  request.  The  mere  request  ought  not 
necessarily  imply  compliance. 

Q.  Are  there  any  marks,  distinguishing  or  otherwise,  which  comes  down  to  the  labora- 
tory?— A.  The  serial  number  is  the  only  mark.  There  have  been  times  when  Mr.  Rem- 
sen has  sent  us  samples  which  had  a  letter  on  them  instead  of  a  number. 

Q.  Whose  make  of  instruments  (polariscope)  have  you  in  the  laboratory  ? — A.  Two  of 
the  instruments  in  use  are  known  as  the  Scheibler  instruments,  and  two  are  manufact- 
ured by  Smidth  &  Haench,  Berlin. 


July  29  1887. 

Dr.  Edwd.  Sherer,,  examination  continued. 

Q.  The  mark  A  505  on  that  slip  was  the  sound  and  B  505  is  the  damaged?  It  is  evi- 
dent to  me,  from  the  looks  of  it,  that  B  was  the  damage  and  A  was  the  sound.  Does 
that  7 \  per  cent,  represent  the  damage? — A.  No,  sir.  In  accordance  with  the  regula- 
tions, the  difference  in  the  water  between  the  sound  and  the  damage  constitute  one  ele- 
ment of  the  damage;  the  difference  in  the  polarization  of  the  dry  substance  is  another 
element  of  the  damage.  The  only  consideration  in  the  allowance  of  damage  wThich  would 
weigh  as  far  as  the  tests  of  these  sugars  go  would  be  the  difference  in  the  water  between 
the  sound  and  the  damage.  The  water  in  that  of  the  sound  4.62  and  the  damage  7.50; 
the  difference  between  those  two  would  represent  the  damage  so  far  as  the  test  shows  it. 
I  have  nothing  to  do  with  the  warrant.  My  brother's  allowance  would  be  based  upon 
that  difference  in  water.    The  total  intrinsic  damage  would  be  2.88. 

Q.  Are  the  quartz  plates  that  you  obtain  standard  plates? — A.  The  name  given  them 
by  the  Germans  as  applied  to  those  quartz  plates  is  ' '  normal, ' '  which  I  interpret  to  mean 
standard. 

Q.  Are  you  the  Turkish  consul  at  this  port? — A.  I  am. 

Q.  When  were  you  made  Turkish  consul  ? — A.  I  have  acted  in  that  capacity  ever 
since  1872.    My  official  appointment  is  dated  March,  1877. 

Q.  Where  is  your  office?— A.  At  122  Front  st.,  New  York  City. 
Q.  Have  you  a  place  of  business  down  town? — A.  I  have  not. 

Q.  Do  you  know  of  the  laboratory  which  is  operated  under  the  name  of  Sherer  Bros.? — 
A.  I  do. 

Q.  Does  that  laboratory  adjoin  the  Turkish  consulate? — A.  It  does. 

Q.  Being  connected  by  a  door  which  is  invariably  open  ? — A.  I  have  not  visited  the 


30 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


Turkish  consulate  or  laboratory  for  over  three  years.  I  have  no  knowledge  of  the  pres- 
ent arrangement  of  communication  as  between  those  rooms. 

Q.  Have  you  at  the  present  time  any  interest,  direct  or  indirect,  with  the  business  of 
the  tirm  of  Sherer  Bros.  ? — A.  I  have  at  the  present  time  no  interest,  direct  or  indirect, 
i  n  the  business  carried  on  as  Sherer  Bros. 

Q.  Who  at  the  present  time  constitutes  the  firm  of  Sherer  Bros.? — A.  Mr.  F.  W.  East- 
man. 

Q.  Where  does  he  reside? — A.  At  Roslin,  Long  Island. 

Q.  From  whom  did  Mr.  Eastman  acquire  the  ownership  of  that  business? — A.  As  re- 
gards that  I  am  not  clear.  My  connection  with  that  business  ceased  when  I  entered  the 
service  of  U.  S.  Gov.  in  1880.    I  disposed  of  the  business  to  Dr.  Gideon  A.  Moore  in  1880. 

Q.  Did  a  Mrs.  Dix  at  one  time  own  the  business? — A.  I  believe  so.  She  resides  at 
97th  st.,  Marks  ave.,  Brooklyn. 

Q.  From  whom  did  she  acquire  the  business? — A.  That  I  am  really  unable  to  say. 

Q.  Was  Mr.  Jno.  Sherer,  the  damage  examiner,  your  brother,  interested  with  you  in 
this  business  of  Sherer  Bros,  at  any  time? — A.  Before  Mr.  Jno.  Sherer  entered  the  em- 
ployment of  the  Department  he  was  jointly  interested  with  me  in  this  business. 

(,>.  Do  you  know  whether  he  has  had  any  ownership  in  it  since? — A.  He  has  had  no 
connection  with  it  to  my  knowledge  since. 

Q.  Have  you  at  any  time  sent  or  requested  any  of  the  employes  in  the  laboratory  to 
the  laboratory  of  Sherer  Bros.? — A.  Yes,  I  have. 

Under  what  circumstances  ? — A.  The  circumstances  occurred  about  2}  years  ago. 
I  sent  Mr.  Landsman  down  to  the  laboratory  in  Front  st.,  understanding  he  had  a  friend 
who  wanted  a  situation,  and  understanding  that  my  brother  (who  at  that  time  was  not 
in  the  service  of  the  Government)  wanted  an  assistant.  I  requested  Mr.  Landsman  to 
go  down  and  see  him. 

Q.  Did  his  friend  answer  the  purpose? — A.  My  impression  was  that  he  did  not. 

Q.  Did  you  ever  send  any  of  the  other  employes  of  the  laboratory  to  the  laboratory  of 
Sherer  Bros.? — A.  I  have  no  recollection  of  having  ever  done  so. 

Q.  Have  any  of  the  U.  S.  samples  been  tested  at  that  laboratory  of  Sherer  Bros.  ? — A. 
I  have  no  recollection  of  any  such  matter.  Now  that  you  recall  to  mind  the  possibility 
of  such  an  occurence  of  a  dispute  having  arisen  as  to  the  correctness  of  a  test  and  the  pos- 
sibility of  sending  it  down  there  with  the  view  to  ascertain  if  the  result  found  there  ac- 
cord with  tbe  result  found  here,  I  will  have  to  retract  what  I  previously  said.  What 
you  say  recalls  to  mind  the  possibility  of  such  an  occurrence.  I  also  call  to  mind  that 
if  was  with  the  consent  and  knowledge  of  the  appraiser,  not  Appr.  McMullen,  but  Appr. 
Ketchum. 

Q.  Do  you  remember  sending  any  of  the  examiners  there  to  assist  in  the  testing  of 
general  samples,  not  those  which  had  occasioned  a  question  as  to  the  accuracy  of  the 
test? — A.  Never  by  any  possibility  could  I  have  done  so. 

Q.  When  you  sold  out  your  interest  and  the  interest  of  Sherer  Bros,  was  transferred 
to  Dr.  Gideon  E.  Moore,  did  you  make  any  reservations  in  the  bill  of  sale? — A.  I  think 
not.    I  don't  remember. 

Q.  Have  you  a  copy  of  the  bill  of  sale  ? — A.  I  presume  I  have. 

Q.  Will  you  show  me  the  bill  of  sale  in  the  morning? — A.  I  think  I  must  decline  to 
do  so. 

Q.  On  what  ground? — A.  I  am  prepared  to  state  the  reasons  to  the  Secretary  of  the 
Treasury  in  writing. 

Q.  Do  you  decline  to  state  the  reasons  for  declining  to  me? — A.  I  do. 

The  request  of  the  Secretary,  dated  July  1,  1887,  was  then  handed  to  Dr.  Sherer,  by 
Special  Officer  Byrne,  and  he  continued: 

A.  I  have  not  refused  to  give  any  promise.  I  do  not  regard  the  question  you  have 
asked  me  as  having  any  connection  whatever  with  the  question  of  frauds  or  irregulari- 
ties in  the  sampling  of  sugar,  and  I  am  not  at  liberty  to  do  what  you  ask  because  the 
interests  of  another  party  are  involved  in  doing  so.  It  is  a  bill  of  sale  in  which  he  is 
concerned  as  well  as  myself.    I  have  no  objection  to  state  my  reasons  to  that  extent. 

Q.  If  the  acts  of  officers  of  the  Government  while  in  the  employ  of  the  Government 
are  always  open  to  examining  officers? — A.  The  act  referred  to  was  not  an  act  while  in 
the  employ  of  the  Government;  a  bill  of  sale  of  my  private  property  before  I  entered  the 
service  is  no  bar  to  my  official  conduct  subsequent  to  entering  the  service. 

Q.  Have  you  ever  explained  this  matter  at  the  request  of  any  officer  of  the  Govern- 
ment?— A.  The  subject  of  my  possible  or  supposed  connection  with  the  Front  st.  busi- 
ness and  with  the  Turkish  consulate  has  twice  been  a  matter  of  investigation. 

Q.  By  whom ?^ A.  The  last  time  it  was  by  Mr.  McMullen,  at  the  request  of  the  Sec- 
retary of  the  Treasury.  The  first  time  it  was  at  the  request  of  Gen.  Ketchum,  by  Col. 
Ayer.  It  has  been  twice  reported  upon  to  the  Secretary  of  the  Treasury,  and  once  to 
the  President  of  the  U.  S. 

Q.  You  sold  your  right,  title,  and  interest  by  bill  of  sale;  was  the  bill  of  sale  re- 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSF. 


31 


Corded? — A.  You  must  excuse  me  for  declining  to  give  any  further  information  about 
that  subject. 

Q.  When  you  sold  your  interests  of  the  firm  of  Sherer  Eros.,  did  you  also  give  power 
of  attorney  to  sigu  the  name  of  Sherer  Bros.? — A.  I  have  already  answered  in  general 
terms  what  covers  the  entire  subject.    I  decline  to  go  further  into  the  subject. 

Q.  Is  there  any  one  at  the  present  time  who  has  the  authority,  under  power  of  attor- 
ney, to  sign  the  name  of  Sherer  Bros,  in  connection  with  work  done  on  sugar  at  the  lab- 
oratory of  Sherer  Bros.  ? — A.  The  same  answer  will  cover  that. 

Q.  Do  you  decline  to  answer? — A.  I  decline  to  answer. 

Q.  Where  do  you  transact  the  business  of  your  consulate? — A.  The  business  is  trans- 
acted by  the  clerk  who  represents  me  there. 

Q.  Who  is  he? — A.  His  name  is  Mr.  Burton  Keys. 

Q.  Is  he  a  relative  of  yours? — A.  He  is  a  connection  of  my  brother's  by  marriage. 
He  is  in  charge  of  the  laboratory  at  the  present  time. 
Q.  Do  the  two  offices  connect? — A.  I  don't  know. 

Q.  Have  you  executed  to  him  power  of  attorney  to  annex  the  seal  of  the  consulate  to 
official  documents? — A.  He  has  my  authority.  It  does  not  require  any  power  of  attor- 
ney. The  business  of  the  Turkish  consulate  is  extremely  limited.  It  is  confined  to  the 
routine  work  of  affixing  the  seal  i o  clearances  of  vessels,  &c,  and  it  is  a  matter  that 
very  seldom  requires  my  consideration  at  all.  Official  letters  from  the  Turkish  minis- 
ter are  forwarded  by  M' .  Keys,  and  he  addresses  them  here. 

Q.  Do  Turks  having  official  business  visit  you  at  the  U.  S.  laboratory? — A.  No,  sir. 
It  has  happened  on  one  or  two  occasions  that  indigent  Turks  have  found  their  way 
here,  much  to  my  disgust.  I  have  instructed  the  watchman  to  say  that  the  office  of 
the  Turkish  consul  is  at  122  Front  st. 

Q.  Have  you  ever  sent  for  any  officer  connected  with  the  laboratory  to  come  and  in- 
terpret for  you? — A.  I  should  say  that  would  be  hardly  necessary. 

Q.  Do  you  recall  ever  haying  done  so? — A.  Yes;  I  think  on  more  than  one  occasion. 
I  have  asked  anybody  in  the  laboratory  who  understood  French.  I  understand  it  my 
self  pretty  well,  but  there  have  been  letters  on  subjects  with  which  I  was  not  familiar, 
and  where  the  phraseology  was  not  clear  I  have  a^ked  the  aid  of  any  one  who  could 
give  it —once  of  Mr.  Landsman,  once  of  Dr.  Batkershaw,  onceof  Mr.  Benjamin;  anybody 
that  I  could  get  to  help  me. 

Q.  Did  you  ever  ask  any  of  them  to  assist  in  interpreting  from  a  Turk  ? — A.  There 
was  nobody  there  that  could.    1  should  have  done  it  without  hesitation. 

Q.  Do  you  derive  any  profit,  emoluments,  or  benefits  from  the  firm  of  Sherer  Bros.  ? — 
A.  I  do  not. 

Q.  Were  you  at  one  time  engaged  in  the  manufacture  of  bronze  powder? — A.  No,  sir. 
At  one  time  I  invested  some  money  in  an  enterprise  of  that  sort. 

Q.  Who  constituted  the  firm  ? — A.  It  was  not  a  firm;  it  was  a  company. 

Q.  Who  was  the  president,  treasurer,  and  secretary? — A.  I  must  decline  to  answer 
any  question  in  connection  with  that  matter.  I  lost  every  dollar  I  put  into  it,  and  the 
subject  is  a  painful  one.  It  is  a  matter  of  business  involving  other  people  and  myself, 
and  I  must  decline  to  answer  any  questions  in  relation  to  it.  * 

Q.  Was  action  brought  against  you  in  a  New  York  court  for  rental  ot  the  building 
used  for  the  manufacture  of  the  powder? — A.  Yes,  I  was  made  a  party  of  the  suit  from 
the  fact  of  having  some  money  in  it. 

Q.  Who  was  the  man  that  sued  you  ? — A.  I  must  decline  to  answer.  The  suit  was 
brought  in  a  N.  Y.  court.  I  don't  remember  what  court  or  what  judge.  I  was  called 
as  a  witness  in  that  suit.  I  was  ou  the  stand  for  about  five  minutes.  I  was  called,  and 
in  reply  to  questions,  I  stated  that  I  was  Turkish  consul  at  the  port  of  New  York,  where- 
upon the  judge  dismissed  the  suit.  I  had  made  no  plea  of  that  sort  whatever  and  was 
prepared  to  waive  any  possible  right  I  had  iu  that  connection.  I  was  iuformed  that  I 
could  not  waive  any  rights  I  had.  The  judge  said  it  was  impossible  for  a  suit  to  be 
brought  against  a  foreign  consul  in  that  court.  * 

The  fact  was  brought  out  by  my  own  attorney  asking  me  my  business.  The  plaintiff 
was  informed  that  the  proper  way  was  to  bring  suit  iu  the  U.  S.  court,  which  he  never 
did. 

Q.  Have  you  ever  mentioned  why  ? — A.  No. 

Q.  Have  you  stated  to  certain  of  your  associates  that  the  reason  was  because  the 
amount  was  less  than  $500? — A.  I  may  have  speculated  on  that,  but  I  really  don't 
know  that  the  amount  must  be  $500. 

Q.  Do  you  recall  what  court  the  suit  was  brought? — A.  No,  sir. 

Q.  Was  the  judge's  name  McAdam? — A.  1  think  that  sounds  like  it,  and  I  think  it 
probably  was  him. 

Q.  What  time  was  it  brought? — A.  About  2]  years  ago.    I  don't  recall  the  date. 
Q.  Are  there  any  clauses  in  these  regulations  which,  in  your  opinion,  should  be  changed 
or  modified  in  any  particular? — A.  Well,  I  should  hardly  think  it  worth  while  to  sug- 


32 


frauds  in  new  york  custom-house. 


gest  any  alteration  unless  there  was  an  alteration  in  the  tariff.  I  think  the  Govern- 
ment gets  all  the  duty  it  is  entitled  to. 

Q.  Do  any  importers  or  brokers  visit  the  laboratory? — A.  No,  sir. 

Q.  Did  Col.  Burt? — A.  He  was  once  in  the  office  of  the  laboratory  for  about  five 
minutes.    It  was  the  only  occasion. 

Q.  Does  Mr.  Dreyfoss? — A.  Never  been  there  to  my  knowledge,  and  I  only  saw  Col. 
Burt  once.    Col.  Burt  and  I  are  on  friendly  relations,  not  intimate. 

Edward  Sherer. 

Sworn  and  subscribed  to  before  me  this  30th  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 
Special  Treasury  Officer. 


Exhibit  105. 

New  York,  July  11,  1887. 
Charles  H.  Trainer,  appointed  sampler,  and  acting  as  clerk,  states  as  follows: 
I  first  commenced  my  duties  in  the  sugar  division  June  6,  1885.  My  duties  are  that 
of  a  general  clerk  in  the  office  of  the  assistant  appraiser  of  the  8th  division.  I  make  out 
the  tabulated  daily  statements  of  the  classifications  of  sugar.  I  never  see  or  handle  the 
certificates  of  tests  from  the  laboratory.  I  have  never  seen  Mr.  Jas.  Burt  scrutinize 
the  invoices  or  papers  of  any  importers  other  than  those  he  represents.  I  have  never 
seen  Mr.  Burt  in  the  sugar-room,  nor  have  I  seen  him  go  there.  I  put  the  invoices  of  the 
firms  that  Mr.  Burt  represents  in  the  invoice  blotter,  while  the  memorandums  of  other 
invoices  of  other  importers  I  put  underneath  this  book.  As  a  general  thing  he  looks  in 
that  book  every  day.  This  book  always  lays  upon  au  unoccupied  desk,  and  where  other 
official  papers  are  sometimes  placed.  Mr.  Burt  uses  this  desk  when  he  visits  the  office, 
which  is  almost  daily,  and  where  he  writes  his  requests  for  re-tests  after  perusal  of  his 
notices.  It  is  the  custom  to  retain  Mr.  Burt's  invoices  at  his  request,  pending  a  request 
for  re-test  or  re-sample,  which  custom  I  found  in  vogue  from  the  time  I  went  in  the  of- 
fice as  clerk. 

He  always  asks  for  re-tests  when  he  is  dissatisfied  with  his  classifications,  and  is  always 
granted  them.  He  writes  his  requests  on  the  official  headings  of  the  appraiser's  office, 
and  has  them  sent  to  the  examiner  iu  charge  of  the  sugar-room,  and  sometimes  he  has 
requested  the  messenger  to  carry  them  into  the  sugar-room.  Notices  of  all  other  im- 
portations of  sugar — that  is,  the  notices  of  classification — are  put  on  my  desk,  while,  as 
stated  before,  Mr.  Burt's  notices  are  put  on  the  desk  he  usually  occupies  when  visiting 
the  8th  division.  About  three  months  ago  Asst.  Appr.  Tice  said  he  would  like  to  know 
what  changes  were  made  from  original  test  of  au  invoice,  and  I  suggested  pinning 
to  the  invoice  the  requests  of  the  brokers  for  re-test  and  re-sample.  This  has  since  been 
done.  I  have  seen  employes  of  this  building,  and  not  employed  in  the  8th  division,  in 
the  sugar- room.  I  write  the  tabular  statements  of  sugar  classified  each  day,  about  3 
o'clock  in  the  afternoon.  On  the  following  morning  I  make  out  the  exchange  sheets  for 
Boston  and  Phila.  I  write  up  the  tabulated  sheets  from  the  invoice  after  the  daily  clas- 
sifications have  been  made;  therefore  these  sheets  show  the  correct  classification.  This 
I  assert  positively.  I  have  charge  of  the  returning  of  the  invoices  to  the  invoice  bu- 
reau, and  they  are  returned  properly  at  the  rate  of  about  25  per  day  as  the  classifica- 
tions are  made,  and  if  there  is  any  detention  of  iuvoices  it  is  not  in  the  8th  division. 

The  invoice  of  A.  D.  Hitch  of  3,800  bags  sugar  per  "Bella  Rosa,"  May  21,  '87,  en- 
tered in  warehouse,  on  which  original  test  was  made  of  81.30,  80.20,  80.60,  81.50,  81.00; 
re-test  on  May  28,  81.30,  81.70,  81.50,  81.50;  accepted  test  81.00,  and  in  which  the 
importer  is  represented  by  Mr.  Burt,  was  found  between  the  leaves  of  the  invoice  blotter, 
and  both  Mr.  Trainor,  the  clerk,  and  Examiner  Remsen  declare  was  mislaid  and  should 
have  been  returned  June  1,  last.  The  invoice  blotter  in  which  this  was  found  was  the 
book  that  Mr.  Burt  has  the  exclusive  use  of.  I  know  as  a  matter  of  fact  that  Examiner 
Bowne  details  the  samplers,  and  that  Asst.  Appraiser  Tice  does  not. 

Chas.  H.  Trainer. 

Sworn  and  subscribed  before  me  this  11th  day  of  July,  1887. 

T.  Aubrey  Byrne, 

Spl.  Treasury  Officer. 

New  York,  July  28,  1887. 

C.  H.  Trainer,  sampler,  acting  clerk  in  the  8th  division,  further  states  as  follows: 
It  has  been  the  practice  in  our  office  in  the  8th  division  under  Asst.  Appraiser  Frank 
Hay,  up  to  March  1st  last  (1887),  to  write  the  test  of  classifications  of  sugars  on  the 
" daily  tabulated  statement  of  classifications"  (such  as  are  exchanged  between  the 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


33 


ports  of  Boston  and  Philadelphia,  as  provided  in  par.  4,  S.  S.  0859),  from  the  notices  as 
mailed  to  importers,  informing  them  of  the  classilication  of  their  sugars. 

Since  that  time  Asst.  Appraiser  Hay,  about  March  1st,  instructed  me  to  copy  the  clas- 
sification from  the  invoices  as  made  up  each  day.  The  reason  he  gave  for  ordering  this 
change  of  practice  was  "  that  changes  might  be  made  in  the  classification  on  subsequent 
tests,  made  at  the  requests  of  brokers  and  importers." 

This  order  was  issued  to  remedy  the  cause  of  complaints  made  at  Boston  in  regard  to 
the  errors  in  the  tabulated  statements  of  classifications  as  furnished  from  the  appraiser's 
office  at  New  York. 

Chas.  H.  Trainer. 

Sworn  and  subscribed  to  before  me  this  28th  day  of  J  uly,  A.  D.  1887. 

T.  Aubrey  Byrne,  • 
Special  Treasury  Officer. 


Port  of  New  York,  Appraiser's  Office, 

402  Washington  Street,  July  11,  1887. 

T.  Aubrey  Byrine,  l^sq., 

Special  Agent  U.  S.  Treasury: 

Sir:  I  desire  to  state  in  connection  with  my  testimony,  given  this  day,  that  the  desk 
on  which  Mr.  Burt  writes  his  requests  for  tests  and  re-tests  (styled  as  an  unoccupied 
desk  in  the  testimony)  is  situated  in  front  of  the  one  used  by  me,  and  placed  in  such  a 
manner  that  no  person  using  it  can  read  whatever  papers  lay  on  my  desk.  The  desk  in 
question  is  used  by  a  number  of  persons  who  have  business  to  transact  in  the  office  of 
the  8th  division.  I  have  always  understood  that  this  desk  and  blotter  (also  referred  to 
in  testimony)  was  retained  for  the  accommodation  of  any  person  who  might  desire  to 
use  them.  "As  to  memorandums  and  other  invoices  placed  beneath  that  blotter, ' '  1  wish 
to  say  that  these  memorandums  are  not  ones  of  invoices,  such  as  cost,  description  ot 
merchandise,  test  of  the  same,  &c,  but  simply  memorandums  in  relation  to  information 
desired  from  importers  by  officers  of  the  8th  div.,  such  as  location  of  vessel,  possible 
time  of  discharging,  &c. 

This  information  is  intended  for  the  U.  S.  samplers  in  order  to  facilitate  their  work 
and  is  of  no  benefit  whatever  to  any  other  parties.  "As  to  invoices  being  detained  at 
the  request  of  Mr.  Burt  (pending  a  re-test  and  re-sample): "  These  invoices  are  ones  as  to 
cargoes  belonging  to  the  importers  whom  he  represents  and  no  others.  I  make  these  ex- 
planations for  the  reason  that  my  testimony  as  written  would,  on  being  read  (by  a  per- 
son not  understanding  the  circumstances),  create  an  impression  not  in  accordance  with 
the  facts,  and  I  am  ready  and  willing  to  make  oath  to  the  correctness  of  said  explana- 
tions. 

Very  respectfully, 

Chas.  H.  Trainer, 

8th  Division. 


U.  S.  Treasury  Department,  May  26,  1887. 

A.  D.  Hitch,  ex  Bella  Rosa  (upon  3,800  bags). 

Original  tests:  81.30,  80.20,  80.60,  81.50,  81.00. 

Retest:  28th,  81.30,  81.70,  81.50,  81.50  (accepted  test).  (?) 

A.  G.  Remsen,  Exr. 


Port  of  New  York,  Appraiser's  Office, 

402  Washington  street,  May  28,  1887. 

To  the  Appraiser  : 

We  are  dissatisfied  with  your  test  of  our  3,800  bags  sugar  per  Bella  Rosa  and  have 
to  give  notice  that  we  desire  to  have  these  sugars  re-tested  and  re-sampled.  (No  changes 
on  re- test.) 

Very  truly,  yours, 

Havemeyers  &  Elder. 
Per  J.  R. 

S.  Ex.  123  3 


34 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 

— W 


12258.]  (Copy.)  [73801. 

Consular  invoice  of  3.800  bags  Brazil  brown  sugar,  purchased  by  Henry  Foster  &  Co. 
in  April,  '87;  shipped  at  Parahyba  for  New  York,  per  Brit,  b'gtine  Bella  Itosa,  Bow- 
den,  master;  consigned  to  the  London  &  Brazilian  Bank  (ltd)  by  order  and  for  account 
of  whom  it  may  concern. 

A.  D.  Hitch. 

(Written  in  red  ink:)  Not  above  No.  13,  D.  S.;  test,  81.00;  $1.64. 

3,800  bags  sugar,  weighing  net  285,000  kilos;  cost,  free  on  board,  in- 
cluding all  charges  and  comm.  ex  freight   £2,289  14  11 

Equivalent  to  a  21 2  exchange     R.  25, 559, 950 

E.  &  O.  E. 

Pernambuco,  14  April,  1887. 

pp.  Henry  Foster  &  Co. 
I.  Swift,  Jr. 

[Custom-house stamp,  May  21,  '87.]  [Ware-house,  6th  div.,  May  21,  '87.] 

(J.  Burt,  broker). 

(Written  in  red  ink:)  Sugar  as  noted.    May  31,  '87.    Correct. — A.  G.  R. 


Exhibit  106. 

John  A.  Sherer,  damage  examiner  1st  division  U.  S.  appraiser's  store  (Asst.  Appr. 
Moore  in  charge  of  division),  duly  sworn,  declares  as  follows: 

Examined  by  Special  Officer  Byrne: 

(x>.  Have  you  been  engaged  in  making  damage  allowances  to-day  ? — A.  No,  I  can't  say 
that  I  was.    1  have  been  examining  to-day. 
Q.  Where  ? — A.  At  Woodruff's  stores. 

Q.  Have  you  made  any  previous  examination  of  the  damaged  sugars? — A.  Yes,  sir. 
You  have  completed  your  examination  of  the  damage  sugars? — A.  I  can't  say  that 
1  have.    I  shall  probably  see  them  again  before  I  get  through. 

<c>.  You  have  already  ascertained  the  result  of  the  damage  samples? — A.  Yes. 
Q.  And  this  slip  that  you  now  hand  me  is  the  result? — A.  Yes. 

Q.  You  have  ascertained  that  the  polariscopic  test  of  the  damage  sample  is  80.30,  the 
dry  test  is  80.31,  the  mark  is  505B,  moisture  is  7.50  per  ceut.  This  application  for 
damage  allowance  covers  the  importation  of  Geo.  Ropes,  barque  Jeosie  Troup,  from  llo- 
ilo,  date  July  19th,  1887,  landed  from  June  27th  to  July  13th,  and  embraces  3,500  bags, 
the  marks  beiug  A.,  B.,  and  C,  landed  at  Woodruff's  stores  ? — A.  Yes;  the  application  was 
received  by  me  on  the  25th  July. 

You  next  worked  on  it? — A.  The  day  before  yesterday — the  26th. 

Q.  The  day  you  drew  your  samples  of  damaged  sugar? — A.  Yes,  to-day  I  drew  the 
sample  of  sound  sugar;  I  did  not  examine  the  vessel;  when  it  is  practicable  I  do  so. 
It  was  not  done  in  this  case;  it  was  already  discharged  when  I  saw  the  warrant. 

(,).  Your  work,  so  far  as  the  ascertainment  of  damage  is  concerned,  simply  depends 
upon  the  ascertainment  of  the  result  of  the  dry  test  of  the  sound  sugar? — A.  I  don't 
say  altogether,  because  I  expect  to  see  this  sugar  again;  I  am  not  entirely  satisfied  about 
it.    I  almost  always  draw  my  own  samples. 

Q.  You  were  appointed  damage  examiner  when? — A.  I  was  appointed  sugar  examiner 
on  1st  Jan'y,  1880,  and  I  was  assigned  to  my  present  position  by  order  of  Appraiser 
Butcher.  My  position  has  never  changed  since  except  that.  I  am  a  general  damage 
examiner,  not  specially  on  sugar. 

I  resigned  in  1884.  I  think  it  was  about  July  or  August,  1884,  and  reappointed  on 
the  1st  Sept. 

Q.  During  that  interim  were  you  engaged  in  business? — A.  Yes. 
0.  Where?— A.  122  Front  St. 

Q.  At  whose  place? — A.  At  Sherer  Bros. ;  the  business  was  conducted  under  the  name 
of  Sherer  Bros. 

Q.  And  during  that  interim  you  engaged  in  business  there? — Yes. 

Q.  Who  was  on  charge  of  the  business  at  122  Front  St.  prior  to  your  resignation  ? — 
A.  Mr.  Wm.  J.  Rigney  was  in  charge  of  the  business  there. 

Q.  And  when  you  took  charge  of  the  business  was  he  still  there? — A.  No,  sir;  he  made 
arrangements  in  another  business  for  himself. 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


35 


Q.  You  stayed  there  for  about  how  long  ?— A.  I  suppose  about  30  days. 

Q.  And  during  that  time  you  arranged  and  put  another  man  in  your  stead  ?— A.  Yes, 
another  man  took  charge  of  it.  I  sold  out  the  business  after  I  left  there  as  soon  as  I 
could  do  so. 

Q.  To  whom  did  you  sell  the  business?— A.  I  sold  it  at  that  time  to  a  Mrs.  C.  B.  Dix, 
a  lady  who  had  a  son  in  the  business.    He  was  about  19  or  20  years  of  age. 
Q.  What  was  he  doing?— A.  He  was  testing  sugars. 
Q.  Reading  by  polariscope  ? — A.  Yes. 

Q.  You  say  this  young  man  was  using  the  polariscope  and  testing  sugars?— A.  Yes, 
sir. 

Q.  WTho  else  was  employed  there  at  the  same  time?— A.  Mr.  Keys  and*  Dr.  Shreiber. 

Q.  Who  was  in  charge  of  the  office  ?— A.  Mr.  Keys.   He  was  an  employe  of  Mrs.  Dix. 

Q.  Was  Dr.  Shreiber? — A.  He  was  doing  other  examination  work  there;  he  was  not 
receiving  any  salary;  he  was  doing  his  own  work  and  receiving  his  own  pay  lor  it. 

Q.  Mr.  Keys  is  a  relative  of  yours?— A.  He  is  a  brother-in-law. 

Q.  He  is  at  present  in  charge  of  the  laboratory  there? — A.  Yes,  sir. 

Q.  Who  paid  the  employes  at  that  time?— A.  Mr.  Keys.  He  paid  them,  I  suppose, 
by  money  out  of  the  collections. 

Q.  Who  at  the  present  time  is  in  charge  of  the  firm's  business?— A.  Mr.  Keys  is  still 
there,  carrying  on  the  business  under  the  firm  of  Sherer  Bros. 

Q.  You  always  have  your  samples  of  damaged  sugars  tested  in  the  laboratory? — A. 
Yes,  sir. 

Q.  Have  you  ever  tested  sugars  at  the  laboratory  of  Sherer  Bros.  ? — A.  I  have. 
Q.  What  authority  had  you  to  test  sugars  there? — A.  I  had  the  authority  of  Appraiser 
Howard. 

Q.  In  writing? — A.  No,  sir;  verbal  permission  to  use  that  laboratory. 

Q.  What  men  connected  with  the  U.  S.  laboratory  have  assisted  you  in  testing  damage 
sugars  at  the  laboratory  of  Sherer  Bros.  ? — A.  No  one  has  assisted  me  there. 

Q.  Has  Dr.  Sherer  ever  tested  sugars  at  the  laboratory  of  Sherer  Bros.  ? — A.  No,  sir. 

Q.  Have  any  of  the  employes  of  the  laboratory  ever  tested  sugar  while  you  were 
there  ? — A.  No,  sir. 

Q.  Who  constitutes  the  firm  of  Sherer  Bros.  ? — A.  Sherer  Bros,  belongs  to  F.M.  East- 
man. 

Q.  Where  does  he  reside? — A.  At  Roselin,  L.  I. 

Q.  When  did  he  purchase  the  interest  of  the  firm  of  Sherer  Bros.  ? — A.  In  January, 
1885.  He  purchased  the  interests  from  me  at  that  time.  However,  I  don't  see  how 
this  is  pertinent  to  the  subject,  Mr.  Byrne.  (Mr.  Byrne  reads  Secty's  instructions.) 
This  has  nothing  whatever  to  do  with  any  fraudulent  transactions  whatever,  any  more 
than  it  has  to  do  with  the  man  in  the  moon. 

I  decline  to  answer  anything  further  except  to  state  in  general  terms  that  I  have  no 
connection  with  that  business,  and  never  had  any  connection  with  it  since  I  was  con- 
nected with  the  Government  employ,  either  as  manageror  director. 

If  you  wish  a  voluntary  statement,  I  state  further  that  I  go  there  with  my  damage 
samples,  and  do  so  at  present,  have  done  so  very  frequently. 

I  have  reserved  the  right  to  do  that  in  the  bill  of  sale,  and  it  applies  personally  to  me. 
I  have  no  right  to  bring  other  people  there,  or  to  do  anything  else  there,  but  I  have  re- 
served that  right  for  the  interests  of  the  Government  and  the  convenience  of  myself  in 
doing  my  duty. 

Q.  Have  you  a  bill  of  sale  of  the  interest  of  the  firm  to  Mrs.  Dix  ? — A.  I  have. 

Q.  You  say  you  made  reservation  of  certain  rights  which  you  were  to  have  in  the  lab- 
oratory ? — A.  Yes,  sir. 

Q.  Did  you  make  this  reservation  when  you  made  your  sale  to  Mrs.  Dix  ? — A.  I  be- 
lieve I  did. 

Q.  When  the  business  came  back  into  your  possession  you  then  sold  it  again  to  Mr. 
Eastman? — A.  1  transferred  it  to  Mr.  Eastman  immediately. 

Q.  In  that  interim  you  were  out  of  the  service? — A.  I  was  not  altogether. 

Q.  Then  there  was  a  portion  of  the  time  that  you  did  own  the  business  while  employed 
in  the  U.  S.  service? — A.  There  was  no  portion  of  that  time  at  all,  because  when  one 
gave  it  up  I  transferred  it  to  the  other. 

Mrs.  Dix  owned  the  business  until  Mr.  Eastman  took  charge  of  it,  and  she  owned  it 
for  about  three  months.  When  she  took  it  I  immediately  returned  to  the  U.  S.  service. 
She  kept  it  till  Mr.  Eastman  took  it.  I  made  the  arrangement  with  Mr.  Eastman;  the 
business  reverted  to  me  for  the  purposes  of  transfer  only. 

Q.  Will  you  put  me  in  possession  of  the  original  transfers  to  Mr.  Eastman  and  to  Mrs. 
Dix? — A.  No,  sir;  I  can  not  do  that,  because  that  relates  to  their  business.  I  would 
not  do  it  without  their  consent. 

Q.  Are  those  bills  of  sale  recorded? — A.  They  are  not  matters  of  record. 

t*>.  Were  you  interested,  directly  or  indirectly,  with  the  manufacture  of  bronze  pow- 


/ 


36  FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 

dei  ? — A.  Yes,  sir;  I  was  interested  in  the  company  organized  for  the  manufacture  of 
bronze  powder.  How  has  that  got  anything  to  do  with  sugar?  1  have  no  objection  lo 
telling  you  I  was  interested  in  the  manufacture  of  bronze  powder,  but  I  was  out  of  the 
service.    I  had  some  money  in  it  which  I  unfortunately  lost. 

Q.  Who  was  a  partner  with  you  in  the  manulacture  of  bronze  powder? — A.  I  had  no 
partner;  it  was  a  company,  a  stock  company. 

Q.  Who  were  the  presdt.,  trear.,  and  frecty.  ? — A.  The  officers  never  succeeded  in 
being  elected.  I  took  the  management  of  it  for  a  short  time.  Mr.  Jas.  H.  Ruggles 
succeeded  me.    He  is  a  Brooklyn  man. 

Q.  Was  Mr.  Eastman  interested  with  you? — A.  No,  sir. 

Q.  You  manufactured  the  bronze  powder? — A.  We  never  manufactured  any  at  all. 

Q.  Did  you  not  open  a  place  for  manufacturing  it? — A.  We  bought  our  factory;  we 
put  our  money  in  the  factory,  and  it  was  intended  for  the  manufacture  of  bronze  powder, 
but  none  was  made. 

Q.  Was  Dr.  Sherer  interested? — A.  Dr.  Sherer  put  in  a  small  amount  of  money  at  my 
instigation,  which  he  lost;  very  much  less  than  a  thousand  dollars. 
Q.  The  business  did  not  prove  a  success  ? — A.  No. 

(t).  There  was  a  claim  made  for  the  rental  of  the  building? — A.  Yes,  sir;  I  see  you  have 
got  it  all.    I  paid  the  rent  because  I  was  liable  for  it. 

Q.  To  whom? — A.  I  had  a  verbal  lease  to  the  first  of  May,  '86,  and  of  course  I  had  to 
pay  the  rent  up  to  that  time,  and  did  so ;  but  they  claimed  a  month's  rent  which  I  refused 
to  pay.  They  sued  me,  but  I  don't  remember  what  occurred;  beyond  this  I  decline  to 
make  any  further  statement.  It  is  something  that  is  not  pertinent  to  the  frauds  in  sugar. 
I  say  that  we  invested  some  money  in  that  business  and  lost  it.  I  invested  when  I  was 
out  of  the  service  of  the  Government,  and  what  I  did  was  only  to  try  and  recover  it. 

<t>.  In  what  court  was  the  action  brought  against  you? — A.  It  was  in  a  New  York 
court.    I  don't  remember  what  court,  and  I  answered  the  suit  with  my  brother. 

Q.  What  was  the  result  of  the  suit  ? — A.  It  was  thrown  out  on  some  technicality. 

Q.  What  was  the  technicality? — A.  That  is  a  personal  matter  and  I  decline  to  answer. 

Q.  As  an  officer  deputized  by  the  Secretary  to  examine  all  officers  and  employes  con- 
nected with  the  appraiser's  store  into  their  acts  as  officers  while  acting  under  instruc- 
tions, I  repeat  my  question.  What  was  the  technicality  which  threw  out  the  suit  from 
the  New  York  court  where  you  and  Dr.  Edward  Sherer  were  sued  for  rental  of  a  build- 
ing in  which  bronze  powder  was  manufactured  by  you  during  1885  and  1886? — A.  That 
is  a  matter  which  you  will  have  to  ask  Dr.  Edward  Sherer  about.  I  decline  to  answer; 
it  is  personal  to  him. 

Q.  Why  is  it  personal  to  him? — A.  I  had  nothing  .to  do  with  that. 

Q.  Then  the  suit  was  not  brought  against  you? — A.  Yes,  it  was  brought  against  me. 

Q.  Why  did  Dr.  Edward  Sherer  answer  the  suit  ? — A.  It  was  brought  against  both  of 
us. 

Q.  Then  you  both  engaged  in  the  manufacture  ? — A.  It  was  because  he  had  money 

invested. 

Q.  Did  you  make  any  of  that  powder  and  sell  it? — A.  No,  sir, 

Q.  Did  you  not  offer  for  sale  that  bronze  powder  on  Long  Island? — A.  No,  sir. 

Q.  Was  not  some  of  that  powder  brought  and  shown  to  officers  in  the  laboratory? — 
A.  Not  that  I  know  of. 

Q.  Mr.  Sherer,  as  an  officer  of  the  appraiser  store,  who  according  to  your  statement 
was  engaged  in  a  commercial  transaction  during  the  time  that  you  were  serving  the 
Government  in  the  capacity  of  a  damage  examiner  of  sugar,  I  ask  you  to  give  me  fully 
all  the  facts  connected  with  the  closing  of  the  said  action  against  you  for  rental  of  a 
building  in  which  yourself  and  Dr.  Edward  Sherer  had  been  engaged  in  making  bronze 
powder,  the  reason  why  the  suit  was  thrown  out  and  the  facts  connected  with  it,  in 
order  that  I  can  transmit  the  same  to  the  Hon.  Secty.  of  the  Treasury. — A.  As  the 
question  which  you  have  asked  is  not  at  all  pertinent  to  the  subject  in  which  you  have 
examined  me  I  decline  to  answer. 

Q.  Have  you  ever  tested  damage  sugars  at  the  office  of  Sherer  Bros,  at  night? — A. 
No,  sir. 

Q.  Have  any  of  the  officers  of  the  U.  S.  laboratory  assisted  you  in  testing  damaged 
sugars  at  the  laboratory  of  Sherer  Bros.  ? — A.  No,  sir. 

Q.  Have  you  any  interest,  direct  or  indirect,  in  the  business  of  Sherer  Bros.,  122 
Front  st.,  New  York  city? — A.  I  have  none. 

Q.  Do  you  realize  therefrom  any  emoluments  or  benefits? — A.  You  just  asked  me 
that  question. 

Q.  One  refers  to  money,  the  other  refers  to  privileges? — A.  I  have  the  privilege  of  ex- 
amining my  damage  sugars  there. 

Q.  Have  you  no  other  privileges  there  nor  interest? — A.  I  own  some  apparatus,  some 
chemical  apparatus  there. 

Q.  Not  included  in  the  bill  of  sale  ? — A.  Yes,  sir. 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


37 


Q.  Will  you  give  me  or  show  me  the  original  bills  of  sale? — A.  No,  sir;  I  can't  do 
that  without  the  consent  of  the  other  parties.    I  don't  think  it  is  pertinent  to  the  case. 

Q.  In  the  bill  of  sale  or  transfer  as  made,  does  that  give  the  power  to  sign  the  name 
of  Sherer  Bros.  ? — A.  It  does. 

Q.  In  all  cases  ?— A.  Yes. 

Q.  Did  you  execute  a  power  of  attorney  to  that  effect? — A.  No,  sir. 

Q.  Was  Dr.  Gideon  E.  Moore  ever  employed  at  that  laboratory  ? — A.  Never  employed; 
he  owned  the  business  at  one  time. 

Q.  Who  is  the  Turkish  consul  at  this  port? — A.  I  believe  my  brother,  Edward  Sherer, 
is;  his  office  is  at  122  Front  st. 

Q.  How  does  it  stand  relatively  to  the  laboratory  of  the  firm  of  Sherer  Bros.? — A.  I 
can  not  answer  any  questions  in  regard  to  my  brother  in  connection  with  the  Turkish 
consulate;  he  can,  no  doubt,  answer  them  satisfactorily  himself. 

Q.  Is  there  a  room  connected  with  the  laboratory  of  Sherer  Bros.,  122  Front  st.,  that 
is  not  used  for  laboratory  purposes?— A.  No;  there  is  a  room  there  that  is  used  by  both. 
It  is  used  in  common  by  the  Turkish  consul  and  the  people  of  the  laboratory.  I  was 
there  to-day.    I  took  my  sugar  there. 

Q.  Did  you  have  this  test  of  sugar  made  there? — A.  No,  sir;  it  was  made  here  in  the 
Government  laboratory;  that  is  the  only  certificate  that  I  received  from  the  laboratory. 

Q.  Was  it  handed  to  you  in  person  ? — A.  It  was  given  to  me  by  Mr.  Flowers. 

Q.  Are  certificates  of  damage  sugar  made  out  on  such  slips  of  paper? — A.  Usually, 
yes;  inclosed  in  such  envelopes  and  addressed  to  me. 

Q.  You  never  have  the  polarization  of  damage  samples  made  out  upon  forms  prepared 
and  furnished  by  the  Department  ? — A.  No,  sir. 

Q.  Who  has  signed  that  memoranda? — A.  "B."  up  there  stands  for  Ball. 

Q.  Does  not  Mr.  Ball  always  make  the  tests  of  damage  sugar? — A.  No,  sir. 

Q.  Invariably? — A.  No,  sir. 

Q.  Usually? — A.  I  don't  know  who  does  it.    I  know  he  does  it  sometimes. 

Q.  Has  he  not  been  detailed  by  Dr.  Sherer  ? — A.  I  don't  know,  sir. 

Q.  Then  this  slip  is  the  only  memorandum  you  have  of  the  polarization  of  damage 
samples  at  the  laboratory? — A.  The  only  one.    They  are  on  record  in  the  laboratory. 

Q.  The  regulations  require  that  the  classification  of  damage  sugar  when  made  shall 
be  noted  on  tabulated  sheets  at  the  close  of  each  business  day  ? — A.  Yes. 

Q.  Is  that  paragraph  of  the  regulations  complied  with  ? — A.  I  don't  know,  sir. 

Q.  You  know  that  the  result  of  damage  allowances  is  not  posted  upon  the  classified 
sheets? — A.  I  don't  know  that. 

Q.  Did  you  ever  see  them  ?— A.  No,  I  never  saw  them. 

Q.  Did  you  ever  give  to  the  clerks  in  the  eighth  division  information  as  to  the  classi- 
fication of  damage  sugar  ? — A.  No,  sir. 

Q.  Is  this  regulation  No.  50  complied  with  ? — A.  I  don't  know  that  it  is.  I  don't  know 
anything  about  it.  I  have  read  the  paragraph.  I  understand  that  it  refers  to  the  collec- 
tor. I  never  had  occasion  to  notice  whether  it  was  carried  out  or  not.  When  my  re- 
turns are  made  I  never  see  them  any  more.  They  are  made  in  the  authorized  way  to 
the  asst.  appr.  of  my  division,  who  signs  them ;  they  pass  out  of  my  hands  with  that. 

Q.  You  always  sign  the  damage  warrants  when  you  are  here? — A.  Every  one  that  I 
myself  make. 

Q.  Does  any  one  else  sign  these  warrants? — A.  Not  my  papers. 

Q.  And  you  as  damage  examiner  alone  sign  the  documents? — A.  As  a  rule  I  am  the 
only  one.    I  am  recognized  as  the  damage  sugar  examiner. 

Q.  Is  it  competent  for  the  ass't  appraiser  to  assign  any  one  to  this  work. — A.  It  is. 

Q.  The  regulation  requires  that  in  so  far  as  practicable,  you  examine  the  vessel  and 
see  its  condition  when  claim  is  made  for  damage? — A.  I  do  that  whenever  practicable. 

Q.  When  and  what  vessel  did  you  last  examine? — A.  I  can  not  tell  ju3t  now.  I 
don't  remember  any  particular  vessel.  In  about  one  instance  in  ten.  When  I  see  a 
vessel  discharging  on  which  there  is  damaged  sugar,  I  go  on  board  the  vessel  and  ex- 
amine her,  anticipating  a  warrant  for  damage,  which  usually  occurs. 

Q.  Who  are  the  damage  brokers  who  make  a  speciality  of  damaged  goods  ? — A.  I 
don't  know. 

Q.  Who  are  the  most  prominent  damage  brokers  that  you  most  often  come  in  contact 
with  ? — A.  I  don't  come  in  contact  with  any  of  them  on  sugar. 

Q.  Do  you  know  Mr.  Kippen,  and  is  he  a  damage  broker? — A.  Yes. 

Q.  Do  you  know  Mr.  Jones,  and  is  he  a  damage  broker  ? — A.  Yes. 

Q.  What  is  the  rate  damage  brokers  usually  get  on  sugar? — A.  I  don't  know  any- 
thing about  it. 

Q.  Does  Mr.  Jones  live  in  your  town? — A.  No,  sir;  not  now,  he  did  once,  I  believe. 
Q.  Do  damage  brokers  come  to  the  office  of  Sherer  Bros.? — A.  No,  sir.    I  want  to  say 
that  I  never  saw  any  one  on  Government  business  at  that  office. 

Q.  Does  Mr.  Joseph  Drey foos  call  at  the  office  of  Sherer  Bros? — A.  I  don't  remember. 


« 


38  ' 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


Q.  Where  is  his  office? — A.  Cor.  of  Pine  and  Front  I  think.  I  don't  remember  the 
number. 

Q.  Is  that  where  his  office  is  at  the  present  time? — A.  I  believe  so. 

Q.  Don't  you  know  that,  as  a  fact,  Mr.  Dreyfoos  is  in  the  same  building  as  that  of 
the  office  Sherer  Bros.? — A.  No,  sir;  I  do  not. 

Q.  Do  sugar  brokers  hand  you  their  sugars  down  town  to  be  tested? — A.  No,  sir. 

Q.  Have  you  not  tested  sugars  after  office  hours  at  the  office  of  Sherer  Bros.? — A.  No, 
sir. 

Q.  How  long  does  it  take  a  damage  warrant  to  pass  through  its  various  evolutions 
from  the  time  that  you  receive  it  until  it  is  returned  to  the  custom-house? — A.  That 
depends  upon  how  long  it  takes  me  to  get  the  return  from  the  laboratory,  and  how  long 
it  takes  me  to  get  all  the  facts  I  want  relative  to  damage — sometimes  a  few  days;  some- 
times a  couple  of  weeks.  If  there  is  any  reason  for  delay  I  don't  return  the  warrant 
until  everything  is  satisfactory — generally  within  two  weeks. 

Q.  Do  you  send  your  sugar  to  the  laboratory? — A.  I  generally  take  them  up,  and 
sometimes  send  them  by  messenger. 

Q.  Who  do  you  hand  them  to  there? — A.  Anybody  that  happens  to  be  there. 

Q.  Do  you  state  whose  sugar  it  is  when  you  take  it  there  ? — A.  No,  sir. 

Q.  Do  you  remember  seeing  me  there  ? — A.  I  do,  sir. 

Q.  Whose  sugar  was  it  you  had  that  day  ? — A.  I  don't  know. 

Q.  Did  you  tell  Dr.  Sherer  whose  sugar  it  was  ? — A.  No,  sir. 

(Mr.  Byrne  makes  the  statement  that  on  the  day  referred  to  by  Mr.  Sherer  when  he 
handed  damaged  sugars  to  Dr.  Sherer  for  test,  he  stated  to  Dr.  Sherer  whose  sugar  it  was, 
and  that  he  would  supply  the  name. ) 

Mr.  Sherer  then  said,  I  desire  to  state  under  oath  that  that  is  false.) 

How  long  usually  is  it  before  you  get  the  return  from  the  laboratory  ? — A.  Gener- 
ally three  or  four  days. 

Q.  You  did  not  know  that  I  was  an  officer  when  you  saw  me  that  day? — A.  No,  sir; 
not  at  the  time. 

Q.  How  do  you  know  damage  samples? — A.  I  know  by  the  appearance  of  the  package. 

t}.  Are  the  packages  stencilled? — A.  No. 

Q.  What  is  the  object  in  waiving  the  stencilling? — A.  Because  the  importer  makes  a 
statement  that  the  goods  are  intended  for  consumption,  and  are  not  going  out  of  the  port, 
when  the  collector  then  waives  stencilling. 

Q.  If  the  bags  of  damaged  samples  are  stencilled  "damaged,"  then  those  goods  can 
not  be  sold  as  sound,  can  they? — A.  I  should  think  it  would  be  difficult  to  do  so.  It 
would  be  detrimental  to  them. 

Q.  Do  you  ever  find  any  sound  sugar  in  the  damaged  packages  ? — A.  Yes. 

Q.  Did  you  find  some  sound  bags  mixed  with  damaged  bags? — A.  Yes. 

Q.  Who  lays  out  the  damaged  packages  ? — A.  Generally  the  store-keepers;  I  mean  the 
warehousemen. 

(,).  You  don't  see  the  damage  packages  until  you  are  sent  to  draw  your  samples? — A. 
I  don't  see  them  without  a  warrant  to  go  there,  or  except  I  happen  to  be  there  at  the 
time. 

(Paragraphs  43  to  17  inclusive  were  then  read,  and  Mr.  Sherer  stated  that  it  is  use- 
less to  read  them  as  he  knew  them  all  by  heart,  as  he  assisted  in  framing  them. ) 

Q.  Have  you  ever  seen  any  tables  made  up  in  this  form,  in  which  result  of  a  damage 
sugar  sample  is  made  out? — A.  None  but  that;  there  are  none  furnished  by  the  Depart- 
ment. 

Q.  What  do  you  understand  was  the  object  in  the  framing  of  par.  47? — A.  To  give 
the  examiner  information  how  to  go  to  work  to  make  out  his  damage  allowance. 

Q.  Who  assisted  or  made  out  the  original  clauses  relating  to  damage  in  the  sampling 
regulations  of  1883? — A,  I  had  a  good  deal  to  do  with  it. 

Q.  Who  did  you  talk  them  over  with? — A.  Col.  Ayer. 

Q.  Who  else  was  present  with  you? — A.  I  don't  remember  that  any  one  else  was. 
Q.  Was  Col.  Burt  present? — A.  No,  sir. 

Q.  Did  you  ever  see  him  in  company  with  Col.  Ayer  while  talking  about  and  framing 
the  regulations? — A.  No,  sir. 
Q.  Do  you  know  Col.  J  as.  Burt? — A.  Yes,  sir. 

Q.  He  is  a  sugar  broker,  is  he  not  ? — A.  He  represents  several  importers  of  sugars,  I 
believe. 

Q.  Does  he  visit  the  laboratory  at  the  appraiser's  store  ? — A.  Not  that  I  know  of.  I 
never  saw  him  there,  but  have  seen  him  in  the  hall.  I  don't  think  I  ever  saw  him  in 
the  damage  division. 

Q.  Did  you  ever  see  him  in  the  appraiser's  room? — A.  No,  sir. 

Q.  What  is  meant  by  commercial  damage  ? — A.  Damage  where  mat  and  bag  sugars 
are  stained  and  wet  without  being  intrinsically  damaged ;  where  the  sugar  is  damaged 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


39 


in  color;  that  is,  would  not  sell  for  sound  sugar,  although  not  damaged;  as  we  express  it, 
"  degraded  in  color." 

Q.  Does  that  apply  to  any  other  goods  ? — A.  No,  sir. 

Q.  Who  coined  the  term  commercial  damage? — A.  I  don't  know. 

Q.  Did  not  you  really  frame  this  paragraph  48  ? — A.  It  was  my  idea  and  I  suggested 
it,  if  I  did  not  frame  it. 

Q.  In  its  application  to  other  commodities  it  may  mean  the  covering? — A.  Yes. 

Q.  But  from  the  context  of  this  paragraph,  it  means  thesugar  itself,  does  it? — Yes,  sir. 

Q.  What  is  the  average  damage  on  steam-ship  centrifugal  cargoes  of  sugar? — A.  Very 
little;  excepting  bags,  there  is  seldom  any  damage  on  sugars  conveyed  on  steamers — prob- 
ably less  than  one  per  cent. 

Q.  On  what  kind  of  sugar  is  the  heaviest  damage  ? — A.  On  East  India  sugars  usually, 
viz,  Philippine  Island  sugars. 

Q.  Do  damage  brokers  visit  the  wharves? — A.  I  have  seen  Jones  and  Kippen  on  the 
wharves,  but  they  never  come  where  I  am. 

Q.  Do  you  reside  in  Flatbush  ? — A.  Yes,  sir. 

(On  the  margin.)  Page  24(17)  with  corrections  and  additions  annexed  hereunto. 

Jno.  A.  Sheeer. 

Sworn  to  and  subscribed  before  me  this  12th  day  of  Aug.,  1887. 

T.  Aubrey  Byrne, 
Special  Treasury  Officer. 

(17) 

New  York,  Aug.  12,  1887. 

I  desire  the  following  changes  made  in  my  testimony  hereunto  annexed,  to  wit: 

(1)  Page  1.  Answer  to  question  four  (4):  Strike  out  word  "  probably." 

(2)  I  said  in  addition,  the  sugars  were  not  in  condition  to  examine  properly. 

(3)  Page  1.  Answer  to  question  5:  Yes,  of  the  sample  taken  at  that  time. 

(4)  Page  5.  Answer  7:  Verbal  authority  instead  of  verbal  "permission." 

(5)  Page  6.  Answer  4:  Strikeout  all  preceding  "F.  M.  Hastman." 

(6)  Page  6.  Fourth  line  from  bottom:  "To  put  up,"  interlined. 

(7)  Page  7.  Sixth  line  from  bottom :  Strike  out  "  altogether. " 

(8)  Page  18.  Thirteenth  line  from  bottom:  "That  he  ever  did,  to  be  added." 

(9)  Page  21.  Middle  clause  (  ),  add:  "As  I  assisted  in  framing  them." 

Jno.  A.  Sherer. 

Sworn  and  subscribed  to  before  me  this  12th  day  of  Aug. ,  A.  D.  1887. 

T.  Aubrey  Byrne, 

Spl.  Treasury  Officer. 


Aug.  12,  1887. 

Upon  referring  to  my  stenographic  notes  I  find  as  follows: 

Change  No.  1,  as  above,  the  word  probably  was  used  by  the  witness,  and  the  words 
alluded  to  in  change  No.  2  were  not  used  by  the  witness. 

Change  No.  3  is  not  correct,  as  he  answered  only  "yes." 

Change  No.  4  is  not  correct,  as  he  used  the  term  ' ;t  verbal  permission." 

Change  No.  5  is  not  correct,  as  he  used  the  words  in  evidence  preceding  F.  M.  East- 
man. 

Change  No.  6  is  not  correct,  as  he  said,  "  I  go  there  with  my  damaged  samples." 
Change  No.  7  is  not  correct,  as  he  said,  "I  was  not  altogether;  no." 
Change  No.  8  is  not  correct,  as  he  said,  "  I  don't  remember." 
Change  No.  9  is  correct. 

ri  his  last  change  is  the  only  one  made  by  the  witness  which  is  borne  out  by  reference 
to  my  notes. 

H.  W.  Kerr. 

Stenographer. 

Sworn  to  and  subscribed  before  me  this  12th  day  of  Aug.,  1887. 

T.  Aubrey  Byrne, 

Spl.  Treas.  Officer. 


New  York,  July  29,  1887. 

I,  T.  Aubrey  Byrne,  special  Treasury  officer,  having  duly  sworn  Damage  Examiner 
John  A.  Sherer,  previous  to  taking  the  testimony  of  said  officer,  said  testimony  with 
questions  and  answers  being  hereunto  annexed,  certify  that  it  is  substantially  correct  in 
every  particular,  and  the  reason  of  its  not  being  signed  by  theofficer  under  examination, 
Mr.  John  Sherer,  arises  from  the  fact  that  the  asst.  appraiser  of  the  damage  division 
stated  he  was  suddenly  called  away  from  the  city  by  the  serious  illness  of  his  child,  and 
S.  Ex.  3  61 


40 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


would  not  return  for  several  days.  This  statement  was  taken  yesterday,  the  28th  in- 
stant, about  4  o'clock  p.  m. ;  the  testimony  being  ready  for  signature  this  morning,  the 
29th  instant. 

T.  Aubrey  Byrne, 
Special  Treasury  Officer. 

I  hereby  certify  that  the  transcription  of  the  testimony  of  Mr.  John  Sherer,  above  re- 
ferred to,  is  a  correct  copy  from  my  stenographic  notes. 

H.  W.  Kerr, 

Stenographer. 


Exhibit  106J. 

Aug.  12th,  1887. 

(Add  to  John  A.  Sherer's  testimony.) 

At  my  request  Damage  Sugar  Examiner  Jno.  A.  Sherer  met  me  at  the  custom-house. 

His  evidence  was  presented  to  him  ibr  approval  and  signature.  He  made  some  nine 
changes  in  the  testimony,  thereby  qualifying  certain  statements  that  he  had  made. 

Upon  reference  to  the  stenographer's  notes,  I  find  that  the  changes  were  not  properly 
made,  inasmuch  as  the  statements  made  in  that  testimony  were  a  transcription  of  the 
notes  taken  by  the  stenographer  at  the  time  the  evidence  was  given. 

Mr.  Sherer  referred  to  the  statement  made  by  me,  that  he  had  given  the  name  of  the 
importing  firm  whose  sugar  he  had  handed  to  Dr.  Sherer  at  the  time  that  I  was  present 
in  the  laboratory  engaged  in  conversation  with  Dr.  Sherer,  the  chief  chemist  there. 

He  asked  me  to  give  him  the  name  of  the  firm  whom  he  said  the  damaged  sugars  be- 
longed to.  I  stated  that  I  would  give  the  name  to  the  Secty.  of  the  Treasury.  He  said 
that  he  knew  that  I  had  said  that  he,  John  Sherer,  had  given  the  name  of  the  owner  of 
the  damaged  sugar  to  his  brother,  Dr.  Sherer,  for  Dr.  Baker,  chemist  in  the  general 
laboratory,  had  told  him  that  at  that  time  (last  fall)  I  remarked  to  him  in  substance  the 
above  fact,  which  was  not  a  fact,  inasmuch  as  he  did  not«name  the  importer  to  Dr.  Ed- 
ward Sherer. 

In  connection  with  his  interest  in  the  manufacture  of  bronze  powder,  he  said  that  he 
had  engaged  himself  in  that  business  at  a  time  when  he  was  out  of  the  Govermt. 
employ  and  that  while  he  was  engaged  in  that  business  he  was  not  an  officer  connected 
with  the  customs  service. 

That  although  the  suit  for  rental  of  the  building  used  by  the  bronze  powder  manu- 
facturing firm  was  not  brought  until  early  in  1886  his  connection  with  the  firm  was  a 
year  prior  to  that  time,  viz,  in  1885. 

That  no  goods  were  made  and  sold  or  offered  for  sale.  That  he  still  is  unable  to  re- 
member the  court  in  which  the  suit  was  brought,  neither  did  he  remember  the  name  of 
the  judge  before  whom  it  was  tried. 

He  refused  to  state  the  name  of  the  party  who  brought  the  suit;  he  said  that  his 
memory  failed  him  in  regard  to  the  matter,  as  it  was  a  disagreeable  subject  to  him,  and 
that  I  had  no  right  to  enter  upon  it  again  at  the  investigation. 

T.  Aubrey  Byrne, 
Special  Treasury  Officer. 


Exhibit  107. 

New  York,  July  14,  1887. 
Robert  Rigney,  examiner  in  laboratory,  states  as  follows: 

I  was  appointed  July  12th,  '83,  as  examiner.  My  specific  duties  are  the  polarization 
of  sugar  samples.  There  are  other  polariscopists  in  the  laboratory,  among  them  Mr. 
Theodore  G.  Morse;  he  does  not  read  any  tubes,  for  what  reason  I  do  not  know.  Occa- 
sionally Ernest  J.  Chapman  reads  the  tube;  he  is  a  messenger;  he  simply  puts  his  ini- 
tials to  his  certificates  of  tests.  Capt.  Flowers,  sampler,  acting  clerk,  has  made  tests, 
more  formerly  than  at  the  present.  There  are  only  two  standard  quartz  plates  in  the 
laboratory  belonging  to  the  Government,  that  I  know  of,  which  read  99.1  and  96.  Dr. 
Sherer,  chief  chemist,  has  stated  to  me  that  the  value  of  the  99.1  quartz  plate  was  cor- 
rect. I  think  he  told  me  he  had  it  tested  by  Dr.  Moore.  I  never  heard  of  a  certificate 
having  been  given  by  Dr.  Moore  certifying  as  to  the  correctness  of  the  marked  value  of 
the  99.1  quartz  plate.  The  tube  which  usually  carries  the  99.1  quartz  plate  is  labelled 
99.1,  so  marked,  I  think,  by  Mr.  Abbott,  an  examiner  in  our  laboratory.    Dr.  Shere. 


• 

FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE.  41 


has  told  me  that  I  had  examined  the  quartz  plate  that  had  been  sent  to  Boston,  but  I 
have  no  recollection  of  it.  I  have  seen  Dr.  Sherer  in  conversation  occasionally,  but  not 
recently,  or  within  a  year,  with  Sugar  Broker  Burt,  in  the  passageways  of  the  public 
store. 

I  was  at  one  time,  immediately  prior  to  my  appointment  as  examiner  in  the  labora- 
tory of  the  appraiser's  store,  in  the  employ  of  Sherer  Bros.,  122  Front  st.,  this  city.  I 
do  not  know  who  constituted  the  firm  of  Sherer  Bros.  I  received  my  check  -  for  salary 
from  Mr.  John  Sherer,  which  were  signed  either  by  John  Sherer  or  Sherer  Bros.  I 
think  they  were  drawn  on  the  Marine  Bank,  recently  failed.  At  the  time  1  left  there 
my  brother,  W.  J.  Rigney,  and  a  boy  were  also  employed.  I  have  seen  Mr.  John 
Sherer  there  frequently,  and  Dr.  Sherer  there  once.  I  believe  Dr.  Sherer  was  and  is 
Turkish  consul,  and  the  Turkish  consul's  office  was  immediately  adjoining  the  labora- 
tory of  Sherer  Bros.,  and  connected  by  a  door.  He  walked  into  the  laboratory  of  the 
firm  one  day  from  the  consul's  office,  talked  with  me  a  few  minutes,  and  walked  out. 
I  assisted  Mr.  John  Sherer  in  testing  any  samples  of  sugar  that  he  brought  in,  but  do 
not  know  if  they  were  damaged  samples  or  not.  I  think  Mr.  Burton  Keyes  is  em- 
ployed by  Sherer  Bros,  at  their  place,  122  Front  st.,  and  that  he  is  a  relative  of  Mr. 
John  Sherer.  I  do  not  know  that  Mr.  John  Sherer  or  Dr.  Edward  Sherer  are  members 
.  of  the  firm  of  Sherer  Bros. 

I  understood  about  three  years  ago  that  Dr.  Gideon  E.  Moore  was  in  charge  of  the 
business  of  the  firm  of  Sherer  Bros.  I  wish  to  qualify  that  by  saying  that  he  was  the 
owner  of  the  business. 

About  a  year  ago  I  heard  that  Dr.  Sherer  was  interested  in  the  manufacture  of  bronze 
powder. 

I  have  heard  it  stated  that  Jas.  S.  Dale,  of  the  8th  division,  loans  money  to  employes 
and  receiving  a  bonus  for  the  consideration. 

If  a  doubt  arises  in  the  mind  of  myself  as  a  polariscopist  when  reading  the  test  of  a 
sample,  when  one-tenth  of  one  per  cent,  (one-tenth  of  one  degree)  will  change  the  clas- 
sification for  duty,  I  take  the  lower  classification. 

I  have  heard  the  remark  made  in  the  laboratory  when  sugars  came  in  late  or  to  be 
re-tested  that     I  suppose  this  is  some  of  Burt's  sugar." 

From  my  experience  as  a  polariscopist  I  freely  state  that  I  do  not  consider  C.  P.  sugar 
as  reliable  when  testing  my  polariscope  as  the  quartz  plate,  which  I  consider  more  relia- 
ble than  a  sugar  solution.  Boneblack  used  in  clarifying  sugar  solution  will  influence 
the  solution  to  a  greater  or  less -extent,  and  will  lower  the  reading. 

Robert  Rigney. 
Sworn  and  subscribed  before  me  this  15th  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 

Sj)I.  Treasury  Officer. 


July  15th,  1887. 

Robert  Rigney,  continued. 
Mr.  T.  A.  Byrne: 

Dear  Sir:  I  desire  to  amend  my  testimony  so  as  to  show  the  time  referred  to  in  the 
paragraph  commencing  on  line  12,  page  2,  and  to  state  that  the  transaction  referred  to 
was  in  1882,  Also,  in  that  portion  of  the  testimony  on  page  2  which  states  that  Dr. 
Sherer  walked  into  the  laboratory  of  the  firm  of  Sherer  Bros,  from  the  consul's  office.  I 
think  he  came  in  from  the  passage-way  of  the  building. 

Robert  Rigney. 

Sworn  and  subscribed  before  me  this  15th  day  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 

Spl.  Treasury  Officer. 


July  15,  1887. 

Robert  Rigney,  continued: 

To-day  S.  F.  Ball,  employed  in  the  laboratory  polarizing  sugars,  asked  me  one  ques- 
tion in  regard  to  my  examination  in  this  investigation,  which  I  refused  to  answer.  We 
had  other  conversation  on  the  subject  of  the  investigation  in  general.  I  can't  recall 
what  the  question  was  relating  to  this  investigation  that  Mr.  Ball  asked  me  this  morn- 
ing. 

Robert  Rigney. 
Sworn  to  and  subscribed  before  me  this  15th  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 
Special  Treasury  Officer. 

♦Erasure  of  s  made  only  by  witness  ichecks). 


42  FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


Exhibit  108. 

New  York,  July  15,  1887. 
Theo.  G.  Morse,  examiner  in  laboratory,  states  as  follows: 

I  was  originally  appointed  as  messenger  and  detailed  as  clerk  in  second  division  Not. 
1st,  1880.  1  was  transferred  to  sugar  laboratory  Mar.  25,  '84,  and  became  an  examiner 
about  one  year  later. 

In  October  or  November  of  1886  Examiner  Abbott,  who  was  in  charge  of  the  laboratory 
during  the  absence  of  Dr.  Sherer,  informed  me  that  I  would  not  be  allowed  hereafter  to 
read  the  sugar  solutions  in  the  polariscope  as  formerly,  and  that  some  one  else  would 
read  them  after  I  had  fully  prepared  the  solutions  for  reading.  To  this  I  demurred, 
and  asked  his  authority,  to  which  he  replied  that  it  was  by  Dr.  Sherer's  direction. 
Since  then  I  have  not  read  the  polariscope. 

1  know  Jas.  S.  Dale,  an  employe"  who  carries  messages  and  sugar  samples  between  the 
sugar  room  and  laboratory.  I  have  heard  that  he  loaned  money  to  employes,  and  that 
he  charged  different  rates  to  different  persons.  I  have  also  heard  that  he  charged  very 
high  rates  in  some  instances.  I  think  I  have  heard  that  he  charges  as  high  as  ten  per 
cent,  a  month.  I  have  borrowed  money  of  him,  and  think  I  paid  him  at  the  rate  of 
either  5  or  10  per  cent,  a  month. 

I  have  never  visited  the  laboratory  of  Sherer  Brothers  except  on  one  occasion,  when, 
as  I  was  leaving  the  laboratory  of  the  Government  about  a  year  ago,  Dr.  Sherer  asked 
me  if  I  would  take  a  note  to  his  brother  John,  the  damage  sugar  examiner,  to  No.  122 
Front  st. ,  which  I  did,  and  left  the  note  with  the  young  man  in  attendance  who  had 
charge  of  the  office. 

In  adjusting  my  polariscope  I  have  used  a  quartz  plate  marked  96.  I  have  seen 
another  quartz  plate  marked  99. 1;  although  I  have  never  used  it.  This  is  the  one  gen- 
erally used  by  Mr.  Abbott.  Dr.  Sherer  generally  uses  the  one  marked  96,  although  he 
uses  the  99.1  sometimes.  I  have  never  seen  any  other  quartz  plates  in  use  in  the  labo- 
ratory, other  than  those  two  mentioned,  to  the  best  of  my  recollection. 

I  have  known  Ernest  J.  Chapman  to  read  the  polariscope  for  sugar  classifications. 
Capt.  Flowers  is  a  polariscopist,  but  is  detailed  as  clerk.  Mr.  Crumbie  occasionally 
makes  classifications  by  polariscope.    I  consider  him  a  first-class  reader. 

In  reading  sugar  solutions  by  polariscope  and  where  the  difference  of  one-tenth  would 
change  the  classification  for  duty  in  favor  of  the  importer,  we  have  been  instructed  by 
Dr.  Sherer  to  give  this  benefit  to  the  importer,  and  am  under  the  impression  that  he 
stated  that  such  action  was  by  order  of  the  Secretary.  From  my  knowledge  of  matters 
in  the  laboratory,  I  believe  this  allowance  to  be  the  general  rule. 

1  have  expressed  in  the  laboratory  occasionally  my  dislike  of  Sugar  Broker  Burt.  I 
believe  that  Mr.  Jas!  F>urt  and  Dr.  Sherer  are  friendly.  A  very  common  remark  in  the 
laboratory  is,  when  we  are  worked  after  hours  and  tests  and  re-tests  are  asked  for,  that 
"  I  suppose  these  are  some  of  Burt's  sugars."  A  general  impression  prevails  in  the  lab- 
oratory that  Sugar  Broker  Burt  receives  more  consideration  in  the  laboratory  than  any 
other  representative  of  sugar  importers. 

Sometimes  serial  numbers  of  sugar  samples  coming  to  the  laboratory  on  the  cans  con- 
taining sugar  samples  do  not  run  consecutively,  thus  the  number  will  jump,  for  instance, 
in  one  day  from  3554  to  3558,  and  the  missing  numbers  will  come  to  the  laboratory  from 
the  sugar- room  the  next  day  or  in  the  next  lot  arriving.  It  is  the  custom  in  the  labora- 
tory for  Examiners  Abbott  and  Landsmann,  Ball,  Rigney,  and  myself,  to  take  the  sugars 
out  of  the  sample  boxes,  weigh  and  prepare  them  for  the  polariscope,  the  serial  num- 
ber on  the  sample  box  being  copied  on  slips  prepared  for  the  purpose,  so  that  each  oper- 
ator sees  the  sugar  before  it  enters  into  solution,  and  their  familiarity  of  the  quality  of 
the  sugar  is  in  their  minds  when  they  test  it  in  the  polariscope. 

From  conversation  overheard  by  me  at  times  in  the  laboratory,  I  am  of  the  opinion 
that  a  great  deal  of  opposition  exists  towards  this  investigation. 

Dr.  Sherer  often  vists  the  sugar-room,  and  explains  certain  sugar  matters  to  Mr.  Ram- 
sen,  the  examiner. 

Dr.  Sherer  is  the  Turkish  consul.  Turks  have  sometimes  visited  Dr.  Sherer  in  the 
laboratory  and  transacted  business  with  him. 

Theodore  G.  Morse. 

Sworn  to  subscribed  before  me  this  15th  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 

Special  Treasury  Officer. 

New  York,  July  20,  1887. 

Theodore  G.  Morse,  sugar  examiner,  U.  S.  laboratory,  states  as  follows: 

Yesterday  while  on  duty  in  the  laboratory,  and  when  Mr.  Byrne's  request  for  a  quartz- 
plate  was  made  known  by  the  messenger,  Patrick  Doonan,  Dr.  Sherer  not  being  pres- 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


43 


ent  at  the  time,  Examiner  Abbott  being  in  charge,  inquiry  was  made  as  to  where  said 
quartz-plate  was,  and  one  examiner  said,  "Smiley,  why  don't  you  get  it?"  Smiley 
said  I  haven't  got  it,  and  the  other  examiners  came  over  where  Mr.  Smiley  was  at  work. 
After  a  lapse  of  some  few  minutes  the  messenger  said,  "Well,  shall  I  go  down  and  report 
that  they  can't  have  it?  "  when  some  one  spoke  up  and  said,  "Well,  hold  on;  we'll  get 
it,"  and  it  was  produced  and  handed  to  the  messenger. 

I  have  particularly  noticed  Examiner  Landsmann  taking  some  part  of  his  polariscope 
out  at  the  close  of  the  day's  business — which  is  not  only  unusual,  but  has  never  hap- 
pened before  to  my  knowledge,  the  presumption  being  that  in  case  the  laboratory  might 
be  visited  by  yourselves,  that  you  would  be  powerless  to  use  or  read  his  polariscope. 
Further  than  this,  the  quartz-rjlates  have  always  heretofore  remained  on  the  polari- 
scope's  stands,  but  last  night  the  quartz-plates  were  removed  from  their  usual  place,  and, 
to  the  best  of  my  knowledge,  were  deposited  with  the  appraiser. 

From  my  observation  in  the  laboratory,  pending  this  investigation,  I  am  convinced 
that  every  possible  obstacle  is  being  thrown  in  your  way  by  the  employes  in  the  labor- 
atory, with  a  view  to  hinder  and  obstruct  and  possibly  defeat  the  object  of  the  investi- 
gation. I  state  further  in  this  connection,  that  certain  conversations  which  I  have  over- 
heard making  light  of  the  investigation,  and  their  continued  confidential  talks  as  soon 
as  any  one  of  them  returned  from  vour  examination  room,  simply  confirms  me  in  the 
belief  that  you  are  not  being  fairly  dealt  with  as  investigating  officers.  The  sugar  ex- 
aminers in  the  laboratory  above  referred  to  are  Abbott,  Landsmann,  Ball,  and  Rigney. 

Theo.  G.  Morse. 

Sworn  to  and  subscribed  before  me  this  20th  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 
Svecial  Treasury  Officer. 


Exhibit  109. 

New  York,  July  11,  1887. 

Alaric  C.  Morgan,  acting  messenger  8th  division,  states  as  follows: 

My  duties  are  those  of  a  messenger,  but  as  a  matter  of  fact  I  am  performing  clerical 
work.  Mr.  Dale  seems  to  be,  and  I  have  understood  is,  sup't  of  openers  and  packers 
under  Mr.  Ramsen,  in  the  sugar-room. 

I  assist  Mr.  Trainer  in  making  out  the  daily  classification  sheets,  or  rather,  the  copy 
that  goes  to  Philadelphia.  I  do  not  see  the  invoices.  He  never  allowed  me  to  make 
out  those  that  went  to  Boston.  I  use  great  care  in  making  these  copies  from  Mr. 
Traiuer's  sheet.  The  unoccupied  desk  in  the  clerk's  room  of  the  ass't  appraiser  of 
the  8th  division  is  principally  used  by  Sugar  Broker  Burt  when  he  visits  the  office,  and 
he  comes  there  daily.  When  he  arrives  he  requests  some  one  of  us  to  go  to  the  sugar- 
room  adjoining  and  see  if  his  notifications  of  tests  are  ready  for  him.  If  they  are  they 
are  brought  out  to  him.  He  then  examines  them,  makes  his  notes,  compares  them 
with  his  own  tests,  and  then  makes  his  requests  for  re-tests  and  re-samples.  He  also 
looks  at  the  invoice  blotter,  which  I  suppose  contains  the  sugar  invoices.  I  never  saw 
any  other  importer  look  at  this  book.  I  never  saw  any  one  enjoy  the  same  facilities  in 
the  division  that  is  accorded  Mr.  Burt.  It  is  tacitly  understood  among  the  employes  of 
the  8th  division  that  Sugar  Broker  Burt  has  powerful  influence,  which  he  can  exert 
through  his  brother,  the  naval  officer. 

Mr.  Dreyfoos  makes  requests  for  re-tests  daily.  I  heard  Mr.  Burt,  in  talking  with 
Asst.  Appraiser  Tice,  say  that  the  tests  hung  up  there  exposed  to  view,  and  every  one 
would  show  that  those  of  Havemeyer  &  Elder  were  higher  than  any  one  else's,  and  that 
no  favoritism  had  been  shown  him,  and  that  any  one  that  said  so  said  what  was  false. 
This  was  about  the  time  you  were  expected  here  to  make  this  investigation. 

I  have  seen  Mr.  Burt  and  Mr.  Trainer  in  conversation  occasionally,  and  I  should  judge 
that  it  was  private.  Mr.  Trainer  used  to  always  go  in  the  sugar-room  and  get  Mr.  Burt's 
tests  as  soon  as  he  arrived,  aud  was  attentive  to  him;  sometimes  I  have  gone.  For  the 
past  month  Mr.  Trainer  has  not  been  so  attentive  to  Mr.  Burt,  and  I  said  to  him:  "Oh  ! 
you  are  not  quite  as  polite  to  Mr.  Burt  as  you  were,  andare  shoving  himoff  on  to  me,  are 
you?"  but  he  made  no  reply.  And  I  have  noticed  that  since  this  investigation  commenced, 
Mr.  Trainer  has  not  been  so  attentive  to  Mr.  Burt  as  he  has  been  heretofore,  while  I  have 
been  more  attentive  to  him,  from  the  fact  that  when  Iwould  see  that  Mr.  Trainer  would 
not  go  into  the  sugar-room  after  his  tests  I  would  do  so. 

The  impression  forced  upon  my  mind  from  surrounding  circumstances  is  that  Sugar 
Broker  Burt  could  generally  have  his  requests  granted.    I  have  heard  Mr.  Burt  say 


44 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


sometimes  that  he  was  in  no  hurry  for  an  invoice  to  be  written  up,  but  I  did  not  know 
what  particular  invoices  he  referred  to. 

Alaric  Cecil  Morgan. 

Sworn  to  and  subscribed  to  before  me  this  11  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 
Special  Treasury  Officer. 


N.  Y.,  July  12,  1887. 

I  have  heard  Examiner  Bowne  and  Sugar  Broker  Burt  in  loud  controversy  occasionally 
in  regard  to  disagreements  of  tests,  and  have  seen  them  almost  directly  afterwards  in 
apparently  close  conversation  together  in  the  hall-way.  The  impression  might  naturally 
be  left  on  the  occupants  of  the  ass't  appraiser's  office  that  the  loud  tone  used  by  them 
was  for  effect  and  unnecessary. 

Alartc  Cecil  Morgan. 
Sworn  and  subscribed  to  before  me  this  12  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 
Special  Treasury  Officer. 


Exhibit  110. 

New  York,  July  15,  1887. 

Gottpield  Landsmann,  examiner  and  polariscopist  in  laboratory,  stated  as  follows: 

I  am  30  years  of  age;  arrived  in  this  country  5  years  ago,  in-1882.  I  am  naturalized 
as  a  citizen  of  the  United  States.  Entered  the  laboratory  in  1883,  through  the  interpo- 
sition of  Sp'l  Ag't  Ayer  and  Dr.  Sherer.  I  obtained  my  knowledge  in  testing  sugars  in 
Austria.    I  tested  4  years  by  polariscope  there,  using  Scheibler's  polariscope. 

Mr.  Abbott  is  in  charge  of  the  laboratory  in  absence  of  Dr.  Sherer.  My  original  sal- 
ary was  $1,200  per  annum,  and  was  advanced  to  $1,800  about  8  mos.  ago,  as  was  alsp 
Mr.  Rigney.  I  occasionally  test  my  polariscope  by  the  quartz  plate.  As  a  rule  it  does 
not  vary.  I  generally  use  the  quartz  plate  mounted  and  marked  96°.  There  is  another 
quartz  plate  in  the  laboratory  marked  99°.  1.  That  is  all  the  quartz  plates  we  have  in 
the  laboratory.    I  have  heard  that  the  99°.  1  quartz  plate  is  not  in  the  laboratory  now. 

I  have  heard  that  Mr.  Dale,  a  messenger,  loans  money  to  the  employes.  I  heard  Mr. 
Morse  once  remark  that  Dale  had  got  much  interest  out  of  him. 

About  two  or  three  years  ago  I  went  to  Dr.  Sherer's  down-town  laboratory,  in  Front 
st.,  to  try  and  get  a  friend  of  mine  a  position  in  Dr.  Sherer's  laboratory,  as  I  heard  he 
wanted  a  man.  I  took  my  friend  down  to  their  office  and  found  Mr.  John  Sherer  there. 
I  introduced  him  to  Dr.  Sherer  at  the  U.  S.  laboratory,  and  he  told  me  to  take  him  down 
town  to  his  office  there.  The  young  man  did  not  get  the  position,  as  Dr.  Sherer  told  me 
lie  had  engaged  Dr.  Shreiber.  I  knew  Dr.  Shreiber,  and  he  remained  in  Dr.  Sherer's 
employ  about  half  a  year.  I  do  not  know  that  Robt.  Rigney  kept  his  position  in  Dr. 
Sherer's  laboratory  a  very  long  time.  I  know  that  Rob't  Rigney's.  brother,  who  is  a 
chemist  on  Wall  st.  to-day,  was  employed  in  the  laboratory  of  Dr.  Sherer,  Front  st. 

G.  Landsmann. 

Sworn  to  and  subscribed  before  me  this  15th  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 
Special  Treasury  Officer. 


July  18,  1887. 

Messengers  Smiley  and  Cole  mix  the  sample  sugars,  breaking  up  lumps,  &c,  in  a 
mortar,  under  my  supervision;  then  I  weigh  out  the  proper  quantities  (13,024  gr.).  I 
make«this  into  a  solution,  pour  it  into  a  tube,  and  place  the  tube  in  my  polariscope. 

Examiner  Abbott  and  myself  usually  work  together,  and  as  we  always  fill  a  duplicate 
tube,  he  reads  one  and  I  the  other. 

If,  for  instance,  I  read  my  solution  95°.  1  and  he  reads  his  95°. 3,  then  95°.  1  is  the 
proper  test  for  classification,  because  it  is  the  lower  of  the  two  tests,  and  because  the 
two  tests  do  not  disagree  more  than  3-10  (three-tenths)  of  one  per  cent. 

If  I  am  perfectly  satisfied  that  the  sugar  tests  95°.  1,  then  I  report  it  95°.  1. 

As  two  polariscopists  always  read  together  on  the  same  sample,  if  one  of  us  reads 
lower  than  the  other,  then  according  to  the  regulation  the  lower  of  the  tests  is  accepted 
as  "the  test  for  classification,"  providing  that  the  variance  bet  wean  the  two  (2)  tests 
does  not  exceed  3-1 0th  of  one  per  cent. 

When  I  am  testing  sugar  one-tenth  (1-10)  of  a  degree  is  of  just  as  much  importance  to 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


45 


me  as  nine-tenths  (9-10ths)  would  be.  In  other  words,  according  to  the  indications  on 
the  scale,  of  ray  polariscope,  so  I  report  the  test.  I  know  of  no  such  thing  in  my  work  as 
favoring  the  importer;  I  never  allow  a  doubt  in  my  mind  to  exist  as  to  whether  l-10th 
of  a  degree  should  go  on  or  off. 

If  my  partner  (polariscopist)  should  persist  in  reading  3-10ths  low,  then  the  test  for 
classification  would  be  lowered,  but,  if  such  should  be  the  case,  I  would  take  pains  to 
ascertain  the  cause  of  his  low  reading  or  my  high  reading. 

In  clarifying  sugar  solutions  with  bone-black,  high  centrifugal  sugars  would  be  more 
affected  than  low-grade  sugars,  but  it  is  only  used  for  low-grade  sugars. 

If  the  color  of  the  solution  with  some  sugars  is  too  dark,  I  could  not  obtain  a  proper 
test  without  bone-black. 

It  is  necessary  to  use  subacetate  of  lead  with  great  care  when  clarifying  sugar  solu- 
tions, for  according  to  the  kind  of  sugar  being  tested,  the  lead  would  influence  the  test 
either  up  or  down. 

I  know  I  have  never  seen  a  sugar  broker  or  importer  in  the  sugar  laboratory.  I  never 
saw  Brokers  Burt  or  Dreyfous  in  the  laboratory.  I  have  no  speaking  acquaintance  with 
Broker  Burt. 

One  day  I  saw  Mr.  Burt  in  the  hallway;  I  asked  who  he  was,  and  was  informed.  I 
know  that  Mr.  Burt  is  Havemeyer's  broker. 

I  was  told  that  Dr.  Sherer  is  the  Turkish  consul.  I  have  seen  Dr.  Sherer  in  conver- 
sation with  dilferent  persons,  foreigners,  in  the  office  of  the  laboratory. 

Since  last  October  (1886)  Mr.  Ball,  sampler,  has  been  making  the  comparative  tests 
of  sugar  in  the  "dry  substance"  exchanged  between  New  York,  Phila.,  San  Francisco, 
Portland,  and  Boston;  prior  to  that  time,  all  of  us  in  the  laboratory  assisted  in  making 
these  tests. 

As  a  rule,  the  tests  of  sugar  made  at  New  York  and  Philadelphia  most  nearly  agree. 

Requests  for  "verifications"  and  "re-tests"  from  the  sugar-room  are  sent  to  the  lab- 
oratory; they  are  received  by  Dr.  Sherer  and  Messrs.  Abbott,  Rigney,  Ball,  and  myself 
and  Morse  also  do  the  work. 

Mr.  Ball,  sampler,  but  acting  polariscopist,  attends  to  the  testing  of  damaged  sugars. 
Alfred  Flowers,  an  attache  of  the  laboratory,  assists  sometimes  in  preparing  the  sugar 
solutions  for  testing. 

I  consider  the  use  of  "C.  P.  (chemically  pure)  sugar  "  a  correct  one  in  ascertaining  the 
true  value  of  a  quartz  plate. 

It  is  my  custom  every  second  or  third  day  to  use  the  96°  standard  quartz  plate,  to  see 
if  my  polariscope  is  in  proper  adjustment,  and  my  instrument  very  rarely  changes;  but 
if  I  should  find  that  it  is  too  high,  by  two-tenths  (2-10ths)  for  instance,  I  deduct  2-10ths 
from  all  my  readings  that  day,  and  if  too  low,  I  add  to  my  readings. 

I  have  heard  the  employes  in  the  laboratory  say,  when  sugars  came  in  to  be  tested 
just  about  3.30  o'clock  in  the  p.  m.  that  "  this  must  be  some  of  Burt's  sugars,"  but  I  am 
satisfied  that  the  men  make  this  remark  in  jest.  In  busy  times  we  test  about  100  sam- 
ples per  day. 

G.  Landsmann. 

Sworn  and  subscribed  to  before  me  this  18th  day  July,  1887. 

T.  Aubrey  Byrne, 

SpL  Treaswy  Officer. 


New  York,  July  30, 1887. 

G.  Landsmann,  examiner,  further  states  as  follows: 

I  was  born  in  Prague,  Austria,  in  1857,  came  to  the  United  States  (declines  to  make 
any  statement  relative  to  the  matter  of  his  arrival  in  this  country  or  as  to  his  naturali- 
zation papers). 

Q.  Are  you  a  naturalized  citizen  of  the  United  States? — A.  If  you  will  prove  to  me 
that  you  are  authorized  to  make  this  examination  by  order  of  the  Secretary  of  the  Treas- 
ury, I  am  ready  to  answer. 

Q.  Did  you  read  the  letter  handed  to  you  dated  July  1st,  addressed  to  the  officers 
and  employes,  by  the  Secretary  of  the  Treasury,  and  handed  you  now  for  identifica- 
tion?— A.  Yes,  sir. 

I  still  decline  to  answer  the  question  as  to  whether  I  am  a  naturalized  citizen  of  the 
United  States  or  not. 

Q.  Did  you  not  promise  to  bring  [me  your  naturalization  papers  this  morning  ? — A. 
Yes,  sir. 

(}.  Why  do  you  now  refuse,  and  with  whom  did  you  consult  in  regard  to  it? — A.  I 
reconsidered  it.  I  asked  this  morning  the  advice  of  Dr.  Sherer  and  of  Appraiser  Mc- 
Mullen,  if  in  case  you  asked  me  for  my  naturalization  papers,  what  I  should  do,  and 
they  told  me  to  follow  my  own  judgment. 


46 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


Q.  On  what  ground  did  you  refuse  to  furnish  your  naturalization  paper  ? — A.  On  the 
ground  of  the  Secretary's  letter  referred  to. 

G.  Landsmann. 

Sworn  and  subscribed  to  before  me  this  30th  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 

Special  Treasury  Officer. 


Exhibit  111. 

New  York,  July  22,  1887. 
William  C.  Jacobs,  examiner  8th  division,  states  as  follows: 

I  was  originally  appointed  as  messenger  in  the  sugar  division  about  11  years  ago,  and 
made  examiner  in  July,  1885,  previous  to  which  time  I  had  been  acting  as  clerk  in  the 
sugar-room,  having  passed  civil  service  and  appointed  to  a  $1,200  clerkship.  In  my  ca- 
pacity as  clerk  I  had  charge  of  the  test-book  and  invoice  blotters.  I  received  the  in- 
voices from  Col.  Osborne,  late  chief  clerk  of  the  8th  division.  It  olten  occurred  that  in- 
voices were  detained  in  the  sugar-room  when  requests  for  re-tests  and  re-samples  were 
made  by  sugar  brokers;  sometimes  we  detained  them  on  our  own  responsibility  when 
we  thought  the  test  was  too  low.  I  received  oftentimes  these  requests  from  brokers  for 
the  re-tests  of  certain  marks  when  they  were  dissatisfied  with  the  classification.  I  can 
not  find  any  authority  in  the  Treasury  sugar  sampling  regulations  for  granting  re- tests  of 
sugars  on  request  of  importers  or  their  brokers.  I  never  saw  Sugar  Broker  Burt  in  the 
sugar-room  but  once. 

I  did  convey  notices  and  messages  from  the  sugar-room  to  the  asst.  appraiser's  room, 
and  carried  back  requests  for  re-tests  when  handed  to  me  by  the  asst.  appraiser  or  his 
clerk.  I  have  also  carried  such  requests  to  the  sugar-room  when  handed  me  by  brok- 
ers. I  have  heard  (when  there  was  a  telephone  connection  in  the  asst.  appraiser's  room 
with  the  central  main  office  connection)  telephone  messages  from  sugar  brokers  asking 
for  a  re-test  of  a  certain  mark,  stating  at  the  same  time  that  their  request  had  been 
mailed  for  same.    I  then  notified  the  asst.  appraiser  or  examiner  in  charge  of  the  message. 

I  think  I  have  received  certificates  from  the  laboratory  of  "verifications,"  ?  nd  I  shall 
try  and  produce  them.  In  noting  ' '  re-tests  "  on  a  certificate  of  verification  is  a  clerical 
error.  I  think  brokers  have  asked  for  verifications,  and  they  have  been  granted  no 
doubt,  as  I  see  no  reason  why  they  should  not  be.  Sometimes,  at  the  request  of  Exam- 
iner Remsen,  and  when  I  was  clerk,  I  wrote  in  the  test-book  the  classifications  in  red 
ink,  and  called  them  off  to  Examiner  Remsen  while  he  put  them  on  the  invoice. 

1  sometimes  carried  sugar  samples  to  the  sugar-room.  I  have  carried  test  reports  from 
the  laboratory  to  the  sugar-room.  Sometimes,  when  I  am  at  work  in  the  sugar- room, 
I  receive  telephone  messages  from  the  examiners  on  their  districts  asking  if  certain  car- 
goes on  which  re-samples  had  been  called  if  we  were  through  with  them,  as  the  houses, 
meaning  the  refineries,  wished  to  melt  the  sugars,  or  the  warehouses  wished  to  store  the 
goods.  I  then  made  inquiries  of  Mr.  Remsen,  and  notified  the  inquirer  that  if  the  re- 
sample  had  been  taken  the  sugars  could  be  melted.  The  importers  sometimes  withdraw 
their  requests  for  re-samples,  and  thereupon  we  have  ordered  the  re-sample  off,  unless 
we  feel  the  Government  has  not  received  its  just  dues.  Written  requests  for  re-tests 
were,  when  I  was  clerk,  always  filed  away,  and  undoubtedly  some  of  them  were  lost. 
I  spoke  to  Mr.  Hay  about  keeping  these  written  requests,  and  he  said  to  keep  them, 
and  thought  this  was  a  good  idea. 

Once,  as  well  as  I  can  remember,  the  fact  was  brought  to  my  attention  by  Examiner 
Bowen  that  certain  samplers  used  their  sponge  too  wet,  and  that  it  must  be  stopped. 
Oftentimes  hogsheads  of  sugar  are  sampled  by  merchants'  samplers  before  U.  S.  samples 
are  taken.  Sometimes  we  used  to  put  letters  instead  of  serial  numbers  on  sample  cans 
sent  to  U.  S.  laboratory  for  test,  the  letters  representing  the  general  cargo  of  sugar  while 
the  serial  numbers  represented  the  sample  packages.  This  was  done  for  comparison. 
Sometimes  when  I  have  gone  to  draw  samples  from  re-sample  packages,  such  re-sample 
being  ordered  by  the  importer  or  broker,  I  have  found  them  melted  up. 

William  C.  Jacobs, 

V-  S.  Examiner. 

Sworn  and  subscribed  before  me  this  22d  day  of  July,  1887. 

T.  Aubrey  Byrne, 

Special  Treasury  Officer, 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


47 


Exhibit  112. 

New  York,  July  26,  1887. 

P.  A.  Hepburn,  examiner,  states  as  follows: 

I  was  appointed  examiner  in  the  8th  division,  Aug.  1,  1885. 

I  have  not  found  anything  in  my  experience  as  an  examiner  that  might  be  properly 
termed  designedly  irregular.  I  am  particular  to  see  that  my  samplers  wring  their 
sponges  dry  before  using  them  on  the  trier,  and  I  am  constantly  watching  that  thing. 
Examiner  Bowne  once  called  my  attention  to  samples  that  had  the  appearance  of  having 
too  much  water  used  upon  the  samples. 

1  have  never  had  my  attention  called  to  the  finding  of  a  fraudulent  stencil-plate,  al- 
though I  understand  there  was  one  such  found.  I  have  repeatedly  protested  as  to  the 
maimer  in  which  sample  packages  were  laid  out  preparatory  to  sampling,  and  have  had 
the  matter  corrected.  Sometimes  I  have  instructed  my  samplers  to  break  down  the  pile 
and  take  out  certain  sample  packages  and  verify  the  mark.  Sometimes  I  find  that  nier- 
chaut  or  brokers'  samplers  have  drawn  samples  from  the  same  packages  that  U.  S.  sam- 
ples are  to  be  drawn  from,  but  before  they  have  been  laid  out  by  the  weigher. 

Sometimes  I  have  insisted  that  the  refinery  people  shall  lay  out  Iloilo,  Cebu,  and 
Manila  sugars,  mark  by  mark,  when  found,  although  the  collector's  permit  to  land  such 
sugars  has  indicated  no  mark.  By  insisting  upon  this,  the  Government  receives  its 
proper  revenue.  And  in  all  such  cases,  when  attention  has  been  called  to  it,  the  rem- 
edy has  willingly  resulted. 

Samplers  carry  keys  to  the  sample-boxes  as  well  as  the  examiners.  The  same  keys 
open  the  district  office  doors;  we  have  a  different  key  entirely  to  open  our  closets  in  the 
district  offices.  In  the  morning  I  give  the  sampler  the  key  to  the  closet  door;  which  is 
always  returned  to  me  before  night. 

I  never  heard  it  proved  as  a  fact  that  sample-closets  had  been  tampered  with,  although 
I  knew  the  closets  were  especially  examined  as  to  their  security,  and  the  locks  changed, 
I  think,  three  times  within  the  last  two  years.  I  think  the  Government  receives  all  the 
duties  it  is  entitled  to  upon  sugars. 

Peter  A.  Hepburn. 

Sworn  to  and  subscribed  before  me  this  26  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 
Special  Treasury  Officer. 


Exhibit  113. 

New  York,  21st  July,  1887. 
Benjamin  H.  Hinds,  special  agent,  examined  under  oath,  said: 

I  was  appointed  by  Secty.  Manning,  to  the  appraiser's  store  about  Novr.  15,  1885.  I 
act  in  a  dual  capacity,  reporting  at  the  same  time  to  Appraiser  McMullen,  and  making 
my  reports  to  the  Secty.  of  the  Treasury  through  the  div.  of  special  agent.  The  bulk  of 
my  work  is  acting  under  orders  of  Appraiser  McMullen.  I  have  dictated  letters  for  Mr. 
MeM alien  when  he  would  tell  me  what  he  wanted  to  say,  giving  me  the  idea.  I  have 
not  dictated  or  had  anything  to  do  with  any  answer  that  came  to  you  in  answer  to  letters 
addressed  to  Mr.  McMullen.  I  may  have  seen  them,  but  I  know  I  have  not  dictated  or 
written  any  answers  that  came  to  you  from  him.  No  irregularities  in  sugar  at  this  port 
have  ever  been  brought  to  my  notice.  Furthermore,  I  never  had  any  reason  to  suspect 
that  any  existed;  if  they  have,  it  is  something  that  I  have  no  knowledge  or  suspicion  of. 

I  have  seen  two  men  around  here  that  I  was  told  were  sugar  brokers;  one  man  I  don't 
know  and  one  I  do  know.  I  don't  know  as  I  ever  saw  Broker  Dreyfoos  in  the  office  of 
the  appraiser. 

Since  your  performance  here  I  asked  who  is  this  man  Dreyfoos.  I  have  seen  Broker 
Burt  two  or  three  times  a  week  around  the  building.  I  have  seen  him  a  good  many 
times  in  the  appraiser's  office.  It  is  not  within  my  knowledge  that  he  makes  daily  calls 
upon  the  appraiser.  He  comes  in  like  anybody  else.  I  never  heard  him  talk  about 
sugar.    I  presume  he  attends  to  that  in  the  8th  division. 

I  never  saw  a  letter  in  the  appraiser's  office  signed  by  the  collector  of  the  port  of  Bos- 
ton, endorsed  by  the  collector  in  New  York,  in  reference  to  the  investigation  in  sugar. 

I  suppose  I  talked  to  the  appraiser  relative  to  this  investigation  a  hundred  times,  but 
I  uever  had  a  conference  with  him  as  to  what  would  be  advisable  to  say.  I  have  not 
written  a  letter  nor  received  one  from  Mr.  Martin  in  six  months.  I  address  my  official 
reports  to  the  Sec't'y  of  the  Treasury. 


48 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


I  have  never  heard  a  word  of  what  you  have  been  doing  through  any  departmental 

source. 

I  never  saw  Mr.  Martin  in  Baltimore  in  my  life.  I  was  not  there  on  the  2nd  of  July. 
I  have  not  been  in  Baltimore,  except  to  pass  through  it,  in  five  years.  On  the  1st  of 
July  I  was  in  Philadelphia;  I  went  in  the  morning  and  came  back  in  the  evening. 

I  had  no  conference  with  Mr.  Tingle  about  this  investigation  further  than  some 
remark  about  the  investigation  going  on  here;  I  don't  remember  what  it  was. 

I  don't  think  I  talked  sugar  matters  with  Special  Agt.  Tingle  in  this  world,  fori 
don't  know  anything  about  them,  and  I  don't  believe  he  does. 

Irregularities  in  sugar  matters  have  been  brought  to  my  notice  by  the  appraiser.  I 
remember  to  have  been  twice,  perhaps  three  times,  at  the  customs  house:  The  first  time 
was  when  Examiner  Bowne  and  Mr.  Examiner  McElwee  had  got  into  a  snarl  in  Jersey 
City  over  the  laying  out  of  samples  of  bag  sugar.  I  think  about  a  lot  of  bag  sugar 
they  could  not  get  the  bass  laid  out  in  proper  shape;  at  any  rate,  they  were  not  satis- 
fied in  the  manner  in  which  the  weigher  had  given  them  the  samples. 

They  claimed  that  the  weighers  had  given  them  the  samples  from  one  part  of  the  cargo 
and  did  not  heed  the  marks.  For  instance,  if  they  required  120  bags,  so  many  of  one 
mark,  so  many  of  another,  they  were  given  120  bags  irrespective  of  any  marks,  and  they 
were  not  satisfied  to  sample  it  in  that  way,  and  refused,  and  they  came  here  and  re- 
ported to  Mr.  McMullen,  and  he  directed  me  to  go  down  and  see  the  authorities  at  the 
custom-house.  I  reported  the  matter  first  to  Mr.  Trellow,  and  went  and  saw  Mr. 
Blatchford,  and  Mr.  McElwee  and  Mr.  Bowne  was  with  me.  The  result  of  which  was 
that  Mr.  Blatchford  gave  some  orders;  it  is  a  year  and  a  half  ago.  I  did  not  consider 
the  matter  of  sufficient  importance  to  report  to  the  Department,  for  it  was  a  matter  for 
the  surveyor  to  attend  to  and  not  the  Dept.,  and  it  was  attended  to,  and  the  result  was 
satisfactory  to  Mr.  McElwee  and  Mr.  Bowne.  They  told  me  so;  I  forget  which  one. 
Mr.  Bowne  told  me  in  substance  that  it  was  satisfactory. 

Q.  (By  Mr.  Byrne.)  Yon  consider,  then,  that  your  duties  as  special  agent  here  con- 
nected with  the  appraiser's  store  is  to  take  up  a  matter — [interrupted]. — A.  You  are 
investigating  sugar  and  I  ha\e  been  answering  your  questions  and  I  don't  care  whether 
they  satisfy  you  or  not.  If  you  have  been  sent  here  to  investigate  me  show  me  your 
authority  and  I  will  answer  you.  I  will  answer  your  questions  as  to  sugar,  but  whether 
I  do  this  or  don't,  I  don't  think  it  is  your  business. 

Q.  I  ask  you  whether  in  the  discharge  of  your  duty — [interrupted]. — A.  You  must 
consider  that  a  person  who  has  been  for  18  years  in  the  customs  is  not  going  to  take  a 
rebuke  from  a  man  who  is  not  an  officer  at  all.  I  report  to  the  appraiser  the  result  of 
any  investigation  I  make  into  sugar  irregularities,  hut  do  not  feel  that  I  am  bound  to 
make  a  record  of  them  to  the  Department  unless  they  are  of  sufficient  consequence  to 
go  to  the  Department;  but  if  there  were  any  gross  abuses  here  I  should  feel  it  my  duty 
to  report  them.    I  have  never  had  any  knowledge  of  fraudulent  stencil-plates. 

1  do  not  feel  that  my  duties  are  entirely  subordinate  to  the  appraiser.  As  I  said, 
I  am  acting  in  a  dual  capacity.  When  the  appraiser  has  work  to  do  I  do  it;  when  the 
Department  has  work  to  do  I  do  it. 

It  I  knew  that  the  regulations  relating  to  sampling  and  appraising  of  sugars  was 
being  violated  I  would  at  once  report  it  to  the  appraiser  or  to  the  Department.  I  should 
feel  it  my  duty,  in  the  first  place,  to  endeavor  to  correct  it.  Failing  in  that,  I  sliould 
feel  it  my  duty,  in  the  first  place,  to  endeavor  to  correct  it.  Failing  in  that,  I  should 
feel  it  my  duty  to  report  to  the  Secty.  of  the  Treasury,  provided  that  it  was  a  violation 
that  involved  any  principle  or  amounted  to  a  violation  of  the  regulations. 

I  can  conceive  things  in  the  regulations  that  are  non-essential,  that  were  started  on 
some  misconception,  that  have  been  found  to  be  utterly  useless  and  worse  than  useless, 
and  that  perhaps  had  been  dropped  by  common  consent  all  round.  I  am  speaking  gen- 
erally now.  I  say  that  the  violation  or  neglect  to  enforce  any  regulation  that  had  any 
meaning  or  value  to  it  I  should  consider  a  subject  to  engage  my  attention  at  once,  and 
would  so  notify  the  Department.  On  the  subject  of  the  sampling  and  testing  of -sugars 
I  have  perhaps  less  knowledge  than  I  have  about  any  other  branch  of  the  custom  serv- 
ice, for  the  reason  that  it  is  in  the  hands  of  specialists,  and  they  have  a  set  of  regula- 
tions to  go  by  which  are  peculiarly  marked  out  for  that  branch  of  the  service,  and  ap- 
plied to  no  other.  I  have  no  doubt  but  that  Philadelphia  and  New  York"  test  by  po- 
lariscope  sugar  lower  than  Boston.  I  suppose  brokers  come  here  to  attend  to  their 
business. 

The  Sect'y  of  the  Treasury  ordered  shortly  after  the  promulgation  of  these  regulations 
that  the  classification  of  sugar  instead  of  being' posted  at  the  custom-house  should  be 
posted  at  the  appraiser1  s  store  or  office,  which  I  consider  a  public  place,  as  any  man  that 
has  any  legitimate  business  in  any  part  of  this  building  can  have  a  pass  to  go  there;  and 
my  opinion  is  that  the  regulation  is  carried  out  when  the  daily  indication  of  the  classi- 
fication of  sugar  is  made  in  the  asst.  appraiser's  office. 

I  am  aware  that  there  is  a  regulation  which  requires  that  classifications  of  sugar  shall 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


49 


be  exchanged  between  certain  ports.  It  has  never  been  brought  to  my  notice  that  they 
were  not. 

The  foregoing  report  of  my  testimony  is  substantially  correct. 

B.  H.  Hinds, 

Spl.  Af/t. 

I,  Henry  W.  Kerr,  being  sworn,  certify  that  this  is  a  correct  transcription  of  my 
stenographic  notes  of  the  conversation. 
Dated  at  New  York,  22d  July,  1887. 

Henry  W.  Kerr, 

Stenographer. 

Sworn  and  subscribed  to  before  me  this  22d  day  July,  A.  D.  1867. 

T.  Aubrey  Byrne, 
Special  Treasury  Officer. 


Treasury  Department,  Office  of  the  Secretary, 

Washington,  D.  C,  Oct.  30,  1885. 

B.  H.  Hinds,  Esq., 

Special  Agent,  appraisei-'s  stores,  New  York,  iV.  Y.: 

Sir:  From  and  after  the  1st  proximo  your  official  station  will  be  the  appraiser's  stores, 
New  York  City.    Your  reports  will  be  made  directly  to  the  Department. 
Very  respectfully, 

D.  Manning, 

Secretary. 


Treasury  Department,  Office  of  the  Secretary, 

Washington,  1).  C,  Deer.  9,  1885. 

B.  H.  Hinds,  esq., 

Special  Agent,  New  York,  N.  Y.: 
Sir:  Referring  to  Department's  letter  to  you  of  the  30th  of  October  last,  in  which  jour 
official  station  at  the  appraiser's  stores,  New  York  City,  was  authorized,  you  are  hereby 
directed  to  report  for  duty  to  Lewis  McMullen,  the  appraiser. 

Respectfully,  yours, 

D.  Manning, 

Secretary. 


Exhibit  114. 

July  6,  1887. 

F.  W.  Howard,  under  oath,  states: 

I  have  been  connected  with  the  appraiser's  store  since  May,  1885,  as  private  secretary 
to  the  appraiser.  I  decline  to  answer  as  to  what  influence  was  brought  to  bear  to  secure 
my  appointment,  other  than  that  I  was  appointed  to  my  position  by  Mr.  McMullen.  I 
am  in  a  remote  degree  related  to  the  wife  of  Mr.  Jas.  Burt  by  marriage.  I  do  not  know 
that  Mr.  Jas.  Burt  had  anything  to  do  with  my  appointment.  Mr.  Jas.  Burt  has  not 
been  in  the  private  room  adjoining  that  of  the  appraiser  more  than  three  times  to  my 
knowledge  since  I  have  been  there.  I  have  seen  him  in  conversation  with  the  appraiser. 
I  have  never  seen  a  sugar  invoice.  I  have  never  seen  a  laboratory  certificate  of  polari- 
zation. Have  not  the  slightest  idea  what  business  brings  Mr.  Jas.  Burt  to  the  apprais- 
er's office.  I  have  been  in  the  laboratory  on  official  business.  I  have  had  conversation 
with  officials  relative  to  the  pending  investigation  in  a  casual  way  only.  They  were 
Stenographer  Bassett,  Chief  Clerk  Kose,  the  appraiser  [2],  and  Special  Agent  Hinds. 
[3]  I  have  upon  one  occasion  written  an  official  letter  for  the  appraiser's  signature, 
which  was  dictated  by  Special  Agent  Hinds,  and  have  [4]  also  occasionally  heard  Special 
Agent  Hinds  dictate  letters  to  Stenographer  Bassett  for  the  appraiser's  signature. 

1  am  a  member  of  the  board  of  civil-service  examiners  for  this  district — the  customs 
district  of  New  York — and  my  only  knowledge  of  matters  relating  to  sugars  is  that  gained 
in  the  questions  put  to  applicants  for  position  in  civil-service  examinations.  1  do  not 
know  to  what  you  refer  when  you  speak  of  a  serial  number  in  connection  with  sugar.  I 
do  not  know  what  sugar-importing  (inns  Mr.  Jas.  Burt  represents.  I  have  known  him  to 
speak  to  for  fifteen  years.  Mr.  Burt's  wife  is  a  cousin  of  my  wife.  Mr.  S.  Seabiny 
Guion,  the  examiner  in  the  ninth  division,  is  a  brother-in-law  of  Mr.  Jas.  Burt.  I  con- 
sider myself  an  occasional  visitor  at  Mr.  Burt's  house,  although  I  call  but  very  seldom, 

S.  Ex.  123  4 


50 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


and  have  never  talked  business  with  him  there  or  elsewhere.  It  was  in  my  room  that 
the  appraiser  asked  Mr.  Moore  to  show  him  his  authority  for  assisting  Mr.  Byrne  in  the 
sugar  investigation.  My  opinion,  as  I  had  formed  it  prior  to  my  examination,  was  that 
this  investigation  was  being  carried  on  in  a  high-handed  manner,  although  1  havehad  but 
little  conversation  with  any  one  on  the  [5]  subject. 

The  lines  numbered  1,2,  3,  4,  and  5,  in  the  margin  were  erased  and  interlined  before  I 
signed  this  statement. 

Changes  made  as  follows:  In  No.  l,one  word  erased;  in  No.  2,  three  words  erased;  in 
No.  3,  one  word  erased  in  three  words  interlined;  inNo.  4,  one  word  erased  and  one  word 
interlined;  in  No.  5,  live  words  erased. 

F.  W.  Howard. 

Sworn  and  subscribed  to  before  me  this  Gth  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 

Spl.  Treasury  Officer. 


New  York,  July  6,  1887. 

I,  F.  W.  Howard,  private  secretary  to  the  appraiser  of  the  port  of  New  York,  upon 
being  duly  sworn  by  Special  Officer  Byrne,  and  having  read  the  clause  in  the  Secretary's 
letter  of  July  1st  addressed  to  officers  and  employes  of  the  appraiser's  store,  refuse  to 
make  any  promises  whatever,  as  I  desiie  to  retain  my  freedom  of  speech. 

F.  W.  Howard. 
H.  A.  Moore, 

Special  Agent. 

Witness : 

T.  Aubrey  Byrne, 

Sped.  Treaty  Officer. 

New  York;  July  8,  1887. 

Mr.  Howard,  upon  being  asked  by  Mr.  Byrne  whether  or  not  any  officer  of  customs 
or  employe  connected  with  the  U.  S.  appraiser's  store  or  custom-house  in  New  York 
City  has  approached  him  or  asked  him  any  questions  relative  to  his  examination  before 
him  on  the  Oth  instant  relating  to  sugar  matters,  says  he  thinks  it  an  improper  ques- 
tion, and  one  that  Mr.  Byrne  has  no  right  to  ask.  and  refuses  to  answer. 

F.  W.  Howard. 

Within  five  minutes  of  Mr.  Howard  leaving  the  examination  room,  Spl.  Agt.  Moore 
visited  the  appraiser's  office  to  request  the  attendance  of'  Mr.  Tice.  The  appraiser  was 
talking  in  a  confidential  manner  with  Mr.  Howard  in  a  corner  of  the  room,  Special 
Agents  Tingle  and  Hines  being  seated  in  the  same  room. 

H.  A.  Moore. 

July  6,  1887. 


Exhibit  115. 

New  York,  July  13,  1887. 

Alfred  Flowers,  sampler,  detailed  as  clerk,  and  also  engaged  upon  the  polarization 
of  sugars,  states  as  follows: 

I  was  appointed  in  1879.  I  am  employed  in  the  laboratory,  and  visit  the  sugar- 
room  almost  daily.  1  transmit  messages  from  the  laboratory  to  the  8th  division  some- 
times, and  have  returned  at  times  with  requests  for  re-tests  and  verifications  of  sugars 
already  tested.  I  have  seen  Mr.  Burt  in  the  sugar-room  of  the  8th  division  many 
times,  up  to  within  a  few  months,  when  the  newspapers  had  something  to  say  about  the 
Burt  inlluence  at  the  appraiser's  store.  1  have  not  seen  him  there  since.  1  have  seen 
him  in  the  laboratory  a  few  times  in  conversation  with  Mr.  Sherer.  I  know  that  Dr. 
Sherer,  Special  Agent  Ayer,  and  Mr.  James  Burt  are  quite  intimate.  Dr.  Sherei  has  re- 
marked to  me  quite  often  that  he  had  just  seen  Burt,  who  said  we  were  reading  sugars 
too  high.  I  told  him,  Sherer,  that  I  guessed  he  would  have  to  stand  it.  The  effect  of 
Mr.  Burt's  remark  upon  Dr.  Sherer,  as  evidenced  by  observation,  was  that  Dr.  Sherer 
was  afraid  of  Mr.  Burt,  either  through  his  influence  or  that  he  might  lose  his  patronage 
at  his,  Dr.  Sherer's,  place  down  town  at  No.  122  Front  st.,  where  he  runs  a  sugar 
laboratory  for  testing  sugar  for  the  trade.  This  laboratory  is  run,  as  I  have  been  told, 
by  a  relative  of  his,  but  I  believe  that  the  profits  of  the  business  are  shared  by  Dr. 
Sherer,  the  chemist,  and  his  brother,  John  A.,  who  is  damage  examiner  of  sugar  at  the 
appraiser's  store. 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


51 


I  am  led  to  the  opinion  from  the  fact  that  under  Secretary's  Folger's administration  of 
Ihe  Treasury  Department,  the  man  who  managed  their  business,  Mr.  Wm.  Kigney,  de- 
manded to  be  taken  into  partnership  with  them,  which  they  refused.  Kigney  then 
leit  them  and  started  a  laboratory  of  his  own  at  109  Wall  st.,  thus  compelling  John  A. 
Sherer  to  resign  his  position  at  the  appraiser's  store  as  damage  examiner  in  order  to  look 
after  their  private  business  at  their  laboratory,  No.  122  Front  st.  After  about  two 
months  he  managed  to  get  the  firm's  business  in  hand,  and  placed  an  employe  there  to 
represent  them,  alter  which  he  was  again  appointed  damage  examiner  at  the  appraiser's 
store  at  an  increase  of  salary  by  Appraiser  Ketchum,  which  position  he  now  occupies. 
I  have  deposited  with  the  People's  Bank,  corner  Cabal  and  Thompson  streets,  this  city, 
at  various  times  other  than  the  last  or  first  of  the  month,  sums  of  money  to  the  credit  of 
Dr.  Edward  Sherer  as  high  as  five  hundred  dollars  at  a  time,  amounting  to  within  the 
past  year  and  a  half  to  about  seven  thousand  dollars.  As  his  salary  is  about  $2,500  per 
year  it  would  only  amount  in  a  year  and  a  half  to  about  $3,700.  Aside  from  this  ac- 
count he  and  his  brother  John  had  an  account  in  the  Marine  National  Bank,  which  failed 
a  couple  of  years  ago,  wherein  they  lost  close  to  five  or  six  thousand  dollars,  as  he 
told  me. 

From  these  facts  I  am  led  to  believe  that  his  down-town  laboratory  renders  him  a 
handsome  income,  and  the  natural  presumption  being  that  on  account  of  his  position  as 
chief  chemist  at  the  appraiser's  store  they,  the  importers,  would,  for  obvious  reasons, 
patronize  the  firm  of  Sherer  Brothers. 

Damaged  sugars  have  been  tested  by  Examiner  Sherer  at  their  down-town  place  of 
business.  Chemists  Gottfried,  Laudsmann,  and  Kobt.  Kigney,  employed  in  the  U.  S. 
laboratory,  have  informed  me  that  after  office  hours  they  have,  at  the  request  of  Dr. 
Sherer  himself,  gone  to  the  laboratory  of  Sherer  Bros.,  at  No.  122  Front  st. ,  and  assisted 
in  testing  merchants'  sugars  for  the  firm.  I  told  them  they  had  better  be  careful  or 
they  might  be  discharged,  which,  I  think,  caused  them  to  stop  it,  or  at  least  1  was  never 
informed  by  them  of  their  continuance  of  the  practice. 

Dr.  Sherer  once  told  me  that  Sugar  Broker  Burt  requested  him  not  to  allow  Chemist 
Abbott  to  test  his  sugars.  This  request  was  complied  with  for  about  ten  days,  and  we 
were  consequently  overworked,  while  Abbott  had  nothing  to  do. 

I  have  often  seen  Mr.  Burt  and  Dr.  Sherer  in  close  conversation  in  the  hallways  of 
the  appraiser's  store. 

Dr.  Sherer  is  the  Turkish  consul,  and  Turks  come  to  the  laboratory  to  attend  to  busi- 
ness with  him,  and  it  has  been  one  of  my  duties  to  make  pen-and-ink  copies  of  letters 
for  Dr.  Sherer  relating  to  the  business  of  his  consulate. 

Recently  Dr.  Sherer  was  sued  in  the  city  court  of  New  York  for  rent  of  a  building 
which  he  had  hired  in  Brooklyn  for  the  manufacture  of  "bronze  powder,"  and  lor  de- 
fense took  advantage  of  the  fact  of  his  being  Turkish  consul  to  prevent  collection  of  the 
debt.  Dr.  Sherer  informed  me  of  this  himself,  and  also  informed  me  that  his  brother, 
John  Sherer,  and  another  man  was  interested  with  him  in  the  manufacture  of  this 
"  bronze  powder."  I  have  seen  and  examined  some  of  this  powder  in  the  office  of  the 
laboratory,  as  shown  to  me  by  Dr.  Sherer,  who  told  me  he  made  it  and  sold  it.  Mr. 
Pratt,  I  think,  of  Koslyn,  L.  I.,  was  the  partner  in  the  concern. 

Mr.  Morse,  a  polariscopist  in  the  laboratory,  is  not  allowed  at  the  present  time  to  read 
polaiiscope  by  order  of  Dr.  Sherer.  I  know  that  Mr.  Morris's  eye-sight  is  as  good  as 
that  of  any  employe  in  the  laboratory,  and  as  fully  capable  to  read  the  polariscope  as 
any  one  there. 

As'the  clerk  of  the  laboratory,  and  being  in  a  position  to  observe  closely,  I  am  fully 
convinced  that  every  effort  has  been  and  will  be  made  to  obstruct  the  course  of  the  pend- 
ing investigation  and  the  intimidation  of  the  employes  of  the  laboratory. 

Alfeed  Flowers. 

Sworn  and  subscribed  to  before  me  this  13th  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 
Special  Treasury  Officer. 


New  York,  July  15,  1887. 

Alfred  Flowers,  further  examined: 

Yesterday  I  returned  to  the  laboratory  after  leaving  the  investigation-room,  and  as  I 
was  passing  in  I  saw  Dr.  Baker  and  Dr.  Sherer  in  conversation,  and  heard  Dr.  Sherer  say 
as  I  passed  that  1  would  not  last  longer  than  this  investigation,  as  I  should  then  be  dis- 
charged.   I  said  nothing  and  passed  on. 

To-day  I  saw  Sugar  Broker  Burt  with  his  head  out  of  the  window  in  the  passage  way 
adjoining  your  investigation-room,  trying  to  look  into  your  room,  and  it  seemed  to  me 


52 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


he  was  trying  either  to  overhear  anything  that  might  he  said  in  your  room  or  trying  to 
see  who  was  there.    His  action  was  noticeable. 

Alfred  Flowers. 

Sworn  to  and  subscribed  to  before  me  this  15th  day  of  July,  A.D.  1887. 

T.  Aubrey  Byrne, 

Spl.  Treasury  Officer. 

Port  of  New  York,  Appraiser's  Office, 

402  Washington  st.,  July  18,  1887. 


Alfred  Flowers,  continued: 

About  the  time  Dr.  Moore  tested  the  99.4  quartz  plate  I  saw  it  in  its  mounting  in  the 
laboratory.  Since  then  I  have  not  seen  it  till  the  16th  instant.  I  have  examined  the 
edges  of  the  tube  (its  mounting)  and  find  that  it  shows  signs  of  having  been  in  daily  use 
for  two  or  three  years.    This  use  has  not  been  at  this  United  States  laboratory. 

Alfred  Flowers. 

Sworn  and  subscribed  before  me  this  18th  day  of  July. 

T.  Aubrey  Byrne, 

Spl.  Treasury  Offieer. 


Exhibit  116. 

New  York,  July  25,  1887. 

John  Howard  Wainwright,  examined. 

In  U.  S.  laboratory,  Dr.  Battershall's  division. 

On  Saturday  I  was  in  Dr.  Sherer's  office,  when  he  requested  me,  in  case  I  was  called 
belbre  you,  to  repeat  a  conversation  previously  held  between  us  relative  to  this  investi- 
gation, but  I  can  not  now  remember  its  particulars.  I  have  seen  Turks,  or  persons  whom 
1  took  to  be  Turks,  in  the  laboratory,  and  upon  one  occasion  1  was  called  upon  by  some 
one  from  the  laboratory  to  act  as  interpreter  and  to  inform  Dr.  Sherer  of  his  desires,  and 
which  did  not  relate  in  any  way  to  U.  S.  Government  business. 

On  Saturday  last,  while  in  conversation  with  Dr.  Sherer  upon  the  subject  of  this  in- 
vestigation, he  made  the  remark  that  you  (Mr.  Byrne)  and  Special  Agent  Moore  were  a 
couple  of  damn  scoundrels  or  words  to  that  effect.  This  remark  was  made  so  that  Act- 
ing Clerk  Flowers  could  hear  it,  and  so  that  others  might  have  heard  it. 

J.  H.  Wainwright. 

Sworn  to  and  subscribed  before  me  this  25th  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 

Special  Treasury  Officer. 


New  York,  July  25,  1887. 
Alfred  Flowers,  clerk  in  U.  S.  laboratory,  states  as  follows: 

On  Saturday  last  Dr.  Sherer  had  aconversation  with  Examiner  Wainwright  in  Dr.  She- 
rer's office,  and  where  my  desk  is  located.  In  the  course  of  their  conversation  I  heard 
Dr.  Sherer  say  to  Mr.  Wainwright  that  you  (Mr.  Byrne)  and  Special  Agent  Moore  were 
a  couple  of  damn  scoundrels. 

Alfred  Flowers. 
Sworn  to  and  subscribed  before  me  this  25th  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 
Special  Treasury  Officer. 


New  York,  July  28,  1887. 

Byron  D.  C.  Foskett,  examined,  8th  division,  states  as  follows: 
I  was  appointed  examiner  of  sugars  in  July,  1885. 

As  to  Far.  3,  I  sometimes  find  that  the  sample  packages  are  not  properly  laid  out,  the 
cause  of  which  is  attributed  to  the  operations  of  merchant  samplers  and  others.  Under 
these  circumstances  the  U.  S.  samplers  can  not  draw  their  samples  properly. 

As  to  Par.  7,  I  have  never  seen  Sugar  Damage  Examiner  Sherer  making  examination 
of  sugar  or  cargo,  but  have  seen  him  in  warehouses  and  refineries  making  inquiries  in  re- 
gard to  same.  I  never  detailed  a  sampler  to  draw  samples  for  examkier  of  damaged 
sugar,  Mr.  John  Sherer. 

As  to  Par.  9,  the  trier  has  to  be  inserted  in  the  package  several  times  as  a  rule  before 
sufficient  sugar  is  drawn  to  fill  the  sample  box. 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


53 


As  to  Par.  10,  samplers  and  examiner  carry  keys  to  the  sample  chests;  sometimes  1 
send  a  memorandum  instead  of  a  letter  of  transmittal  when  I  have  not  Department  form 
at  hand. 

As  to  Par.  11,  in  reference  to  red  plugs,  it  is  not  enforced  at  this  port. 

As  to  Art.  13,  I  do  not  find  that  sugars  in  bags,  hogsheads,  and  other  packages  are  al- 
ways properly  laid  out  mark  by  mark,  necessitating  the  breaking  down  of  piles  of  sam- 
ples in  order  that  the  samples  may  be  properly  drawn  and  entailing  an  unnecessary 
amount  of  labor  and  delay  in  the  sampling. 

Oftentimes  Iloils,  Cebus,  and  Manila  sugars  are  permitted,  on  collector's  order,  to  be 
weighed  as  without  mark,  although  marks  are  in  the  cargo,  necessitating  the  obtaining 
on  the  part  of  the  appraiser's  department  in  formation  from  the  importers  relative  thereto, 
in  order  that  classification  can  be  properly  made.  I  oftentimes  find  damaged  sugars  in 
the  piles  of  samples. 

As  to  Par.  15,  it  is  not  complied  with.  Sometimes  samples  are  placed  in  such  dark 
places  that  a  lantern  is  necessary  to  marks  and,stencilling.  Sometimes  we  find  samples  in 
sample  piles  that  are  not  stencilled  "  U.  S.  sample."  Sometimes  I  found  low  grade  and 
high  grade  sugars  mixed  in  the  sample  piles  as  of  the  same  mark. 

As  to  Par.  17,  sometimes  we  have  sent  into  the  appraiser's  store  samples  in  paper,  large 
tin  boxes  being  not  available. 

As  to  Par.  19,  this  paragraph  is  not  complied  with. 

As  to  Par.  24, 1  permit  the  useof  a  damp  sponge,  outof  which  no  water  can  be  squeezed. 
I  do  not  remember  the  day  that  you  accompanied  me  to  theHavemeyer  &  Elder  refinery, 
and  that  Sampler  Flocken  was  using  a  sopping  wet  sponge  on  his  trier  while  engaged  in 
sampling.    I  did  not  know  that  you  were  a  Government  officer  at  that  time. 

As  to  Par.  26,  this  paragraph  is  not  altogether  complied  with. 

As  to  paragraph  27,  I  never  heard  or  knew  of  this  paragraph  and  section  of  the  Re- 
vised Statutes  being  enforced. 

As  to  paragraph  28,  I  have  sometimes  found  on  directing  my  samplers  to  draw  sam- 
ples from  sample  and  re-sample  packages,  that  they  have  been  melted  up.  This  has 
happened  where  re-sampling  has  been  ordered  by  the  8th  division. 

I  have  sometimes,  when  on  duty  at  the  refineries  been  asked  by  the  refinery  people  to 
telephone  to  the  8th  division  and  inquire  whether  it  was  necessary  to  hold  certain  sam- 
ples and  re-samples  any  longer  in  order  that  they  might  be  melted  up,  and  permission 
has  been  telephoned  to  me  from  the  8th  division  that  they  could  be  melted  up. 

I  succeeded  Examiner  Davis  in  charge  of  district  No.  5  some  months  ago,  and  upon  in- 
quiring for  the  key  of  the  sample-closet,  I  was  informed  that  Sampler  Twamley  had  lost 
said  key  by  accident  overboard.  I  made  no  further  inquiry  in  the  matter,  and  do  not 
know  that  any  other  official  inquiry  was  made  relative  thereto. 

My  attention  was  brought  to  the  fact  that  certain  samples  of  sugar  were  too  wet,  and 
was  cautioned  by  Examiner  Bownein  relation  thereto,  although  the  occasion  of  the  wet 
samples  was  not  on  my  district. 

I  consider  Examiner  McElwee  as  an  able  and  competent  examiner,  and  a  mau  of  un- 
impeachable character. 

When  I  was  on  duty  in  the  8th  division,  I  have  frequently  seen  Broker  Burt  in  the 
office  of  said  division,  and  on  one  occasion  saw  him  in  the.  sugar-room  talking  with  Ex- 
aminer Remsen.  There  was  no  sugar-crushing  machine  on  exhibition  that  day  in  the 
sugar- room. 

I  am  familiar  with  the  sugar-sampling  regulations,  and  in  them  I  have  never  seen  any 
authority  for  granting  re-tests  on  the  request  of  importers  or  sugar  brokers.  When 
sugars  that  Broker  Dreyfoos  is  interested  in  are  being  sampled,  he  or  his  sampler,  John 
Hetherington,  are  generally  around.  Dreyfoos  is  quite  prone  to  make  suggestions  in 
regard  to  the  sampling  of  his  sugar.  He  often  has  conversations  with  the  samplers, 
the  nature  of  which  I  don't  know.    Sometimes  he  talks  with  them  in  my  presence. 

I  would  not  call  the  place  in  the  assistant  appraiser's  division,  where  the  classifica- 
tion sheets  of  sugar  are  posted,  a  public  place.  I  never  saw  a  public  statement  of  dam- 
age allowance  since  I  have  been  examined. 

Byron  D.  C.  Foskett. 

The  sugar- room  of  the  8th  division  was  my  headquarters  from  June  15  to  July  15th, 
instant;  during  that  time  I  have  frequently  seen  Clerk  Trainer  copying  from  the  in- 
voices, alter  classification  had  been  noted  on  the  invoices  by  the  examiner,  the  said 
classific  ations  on  the  daily  tabulated  statement  of  classifications. 

Previous  to  the  time  above  mentioned,  as  I  was  informed  by  Examiner  Bowne,  it  was 
the  custom  to  copy  such  classification  and  laboratory  tests  from  other  records  than  the 
invoices  themselves. 

Byron  D.  C.  Foskett. 

Sworn  and  subscribed  to  before  me  this  28th  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 
Special  Treasury  Officer, 


54 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


New  York,  July  29,  1887. 

Byron  D.  C.  Foskett  examined,  further  states  in  reference  to  his  testimony  of  yes- 
terday, July  28,  wherein  he  stated  that  he  saw  Sugar  Broker  Burt  in  the  sugar-room,  as 
follows: 

I  remember  the  occasion  of  his  presence  there  distinctly,  as  he  was  having  an  argu- 
ment with  Examiner  Remsen  in  regard  to  certain  clayed  sugars,  he,  Burt,  contending 
that  the  lumps  in  said  sugar  should  be  taken  out  before  the  sample  was  sent  to  the  lab- 
oratory, and  that  only  free  sugar  should  be  sent,  while  Examiner  Remsen  held  that  the 
sugar  should  all  be  mixed  up  together. 

B.  D.  C.  Foskett. 

Sworn  and  subscribed  to  before  me  this  29th  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 
Special  Treasury  Officer. 


Exhibit  117. 

New  York,  July  26,  1887. 
W.  D.  Davis,  examined,  sugar  division,  states  as  follows:  • 

I  was  originally  appointed  in  the  sugar  division  as  sampler  in  1878,  promoted  to  ex- 
aminer in  1880  at  $1,800,  promoted  in  1885  to  $2,000,  and  promoted  to  $2,200  in  1886. 

The  only  irregularities  that  I  know  of  in  connection  with  the  importation  of  sugars  at 
this  port,  is  in  relation  to  stenciling. 

I  have  directed  samplers  to  draw  samples  from  re-sample  packages,  and  wc  found  that 
the  re-sample  packages  had  been  melted  up  or  delivered.  This  applies  to  hogsheads. 
Sometimes  at  refineries  when  samplers  have  gone  to  draw  samples  from  re-sample  bags, 
and  mats  that  have  found  that  the  said  re-sample  packages  have  been  melted  up.  I 
can't  explain  why  this  was  done. 

I  have  sometimes  found  that  low  grade  sample  packages  were  mixed  with  high  grade 
sample  packages  in  the  same  mark,  and  vice  versa.  I  have  also  sometimes  found  that 
the  merchant  samplers  had  sometimes  drawn  their  samples  before  the  U.  S.  samplers  had 
reached  them.  I  believe  there  is  an  order  issued  by  Secretary  Folger,  which  modified 
Art.  19  of  the  sugar  sampling  regulations  of  1883,  under  which  merchant  samplers  were 
permitted  to  sample,  sample,  and  re-sample  packages  before  the  Government  samplers 
had  drawn  their  samples.    I  can  not  produce  such  an  order. 

I  know  of  no  violation  of  art.  17  of  the  regulations  for  sugar  sampling,  which  require 
that  samples  in  the  case  of  mats  shall  be  made  upon  the  wharves,  each  mark  being  kept 
separate  and  the  samples  labelled  in  large  sample  boxes  "provided  for  the  purpose." 

I  do  not  know  of  any  mat  samples  being  sent  to  the  appraiser's  store  in  paper,  sample 
tins  being  always  used.  I  have  found  sample  bags  where  t/he  stencil  mark  could  not  be 
seen  by  the  sampler,  but  were  found  by  tearing  the  piles  down.  There  have  been  in- 
stances where  sample  packages  were  not  placed  " easily  accessible  for  sampling,"  as 
called  for  in  article  15  of  said  regulations.  1  have  often  sent  my  samplers  to  take  sam- 
ples in  places  where  the  light  of  a  lantern  was  necessary  to  distinguish  the  marks.  So 
far  as  I  am  aware  the  sugar  examiners  and  samplers  of  the  8th  (sugar)  division  do  not 
draw  samples  from  damaged  packages  for  the  damage  examiner  of  sugars  to  pass  upon. 
I  have  seen  the  damage  examiner  of  sugars  draw  his  own  samples.  I  can  not  say  that 
I  ever  saw  the  damage  examiner  draw  sound  samples  from  a  cargo,  neither  have  I  ever 
seen  men  under  his  direction  draw  such  sam  pies.  I  do  not  know  what  is  meant  by  commer- 
cial damage.  I  have  sometimes  found  sample  packages  (hogsheads)  which  gave  evidence 
that  they  were  not  in  sampling  order,  but  who  disturbed  them  I  do  not  know.  I  have 
also  sometimes  found  the  scoring  of  the  hogsheads  improperly  done.  Paragraph  3  of 
the  sugar-sampling  regulations  is  not  always  complied  with. 

I  have  reported  to  my  superior  officer  that  paragraph  4  had  not  been  complied  with. 
Relating  to  paragraph  9  it  requires  more  than  one  trier  full  to  fill  a  box.  In  some  in- 
stances paragraph  10  is  not  complied  with;  as  for  instance,  in  the  absence  of  the  printed 
form,  viz,  letter  of  transmittal,  a  memorandum  being  made  to  serve  the  purpose.  Par- 
agraph 11,  requiring  use  of  red  plugs,  is  not  complied  with,  and  has  not  been  for  over  a 
year.  As  to  paragraph  14  I  do  not  know  that  its  requirements  are  being  complied  with. 
As  to  paragraph  15  I  do  not  know  that  its  requirements  are  being  carried  out,  but  to  the 
best  of  my  knowledge  and  belief  they  are. 

Sometimes  samplers  have  to  carry  lanterns  to  distinguish  marks  and  whether  the  sten- 
cil "U.  S.  sample"  has  been  put  upon  the  packages.  Sometimes  I  have  had  to  order 
the  sample  packages  broken  down  in  order  that  the  sampler  could  see  that  the  packages 
were  stencilled  sample  packages.  Sample  packages  generally  are  placed  accessible  for 
sampling.    I  would  not  consider  it  detrimental  to  the  interests  of  the  Government  to 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


55 


have  sample  packages  placed  in  close  proximity  to  steam  pipes.  I  do  not  consider  it 
would  take  any  more  time,  care,  or  labor  to  get  the  samplesfrom  packages  so  placed  if  they 
did  not  lay  thero  long.  Sometimes  we  have  found  sample  packages  removed  from  where 
they  were  originally  placed,  and  then  found  them  in  some  other  place  in  the  refinery. 

In  relation  to  article  16  I  have  had  the  sample  packages  relaid  out  so  that  the  samples 
could  be  taken  from  the  middle  of  the  packages. 

I  have  never  known  of  general  samples  from  mats  being  made  upon  the  wharves  in 
other  than  sample- boxes,  paper  never  being  used  to  send  samples  to  the  appraiser's  store. 

In  reference  to  paragraph  19,  see  bottom  of  first  page  in- my  testimony. 

I  know  of  no  paragraph  authorizing  the  use  of  sponges  other  than  paragraph  No.  24. 

I  do  not  permit  my  samplers  to  use  a  sponge  so  wet  that  the  water  can  be  wrung  from 
it,  but  we  are  permitted  to  use  a  damp  sponge,  as  per  construction  of  paragraph  24.  I 
have  seen  certain  instances  where  samplers  have  used  too  much  water  in  their  sponges 
to  clean  their  triers,  and  have  ordered  them  not  to  do  so,  and  informed  them  at  thes  me 
time  that  it  would  not  show  a  normal  sample  and  would  be  detrimental  to  the  interests 
of  the  Government.  •This  applies  in  a  general  sense  to  new  samplers.  I  have  advised 
Isaac  W.  Cole  and  Charles  A.  Fox,  who  are  a  couple  of  new  samplers. 

Relative  to  art.  26,  I  have  found  that  cargoes  of  Iloilo,  Cebar,  and  Manila  sugars  have 
sometimes  not  been  laid  out  mark  by  mark,  requiring  the  general  sampling  of  each  in- 
dividual mark. 

Relative  to  paragraph  27  and  section  2882  of  the  Revised  Statutes,  I  have  never  known 
or  heard  of  any  attempt  on  the  part  of  a  customs  or  inspection  officer  to  seize  a  cargo  of 
sugar  for  violation  of  such  paragraph  and  section. 

Relative  to  paragraph  28 1  know  of  no  violation. 

In  cases  of  re-test,  pending  re-sample,  I  have  heard  at  the  refineries  telephonic  re- 
quests to  the  sugar-room  of  the  8th  division  asking  permission  for  refiners  to  melt  up 
sample  packages  in  cases  where  they  had  withdrawn  their  requests  for  re-sample.  Per- 
mission was  given  from  the  sugar-room  to  melt  up  the  samples  when  they  had  withdrawn 
their  requests  for  re-sample.  I  have  received  such  telephonic  messages  from  Examiner 
Remsen. 

As  to  whether  or  not,  in  my  opinion,  Asst.  Appraiser  Tice  is  competent  to  make  a  proper 
detail  of  samplers  for  duty  on  the  different  districts  is  not  for  me  to  decide.  I  do  not 
consider  that  there  are  any  samplers  at  present  employed  who  are  unfit  for  their  busi- 
ness and  can  not  be  trusted. 

I  have  seen  Examiner  of  Sugars  John  Sherer,  the  damage  examiner,  drawing  samples 
and  otherwise  examining  a  cargo  of  sugar  after  it  had  been  discharged.  I  have  never 
seen  him  make  "an  examination  of  the  vessel  and  of  the  sugar  during  its  discharge," 
as  called  for  in  paragraph  43  of  the  sampling  regulations.  I  could  not  tell,  without  ex- 
amination, whether  the  cargo  was  damaged  or  sound. 

W.  D.  Davis. 

Sworn  to  and  subscribed  before  me  this  27th  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 

Special  Treasury  Officer. 


Exhibit  118. 

Dr.  Jesse  Battershaw,  demist,  U.  S.  laboratory,  states  as  follows: 
I  know  quite  a  number  of  leading  chemists  in  the  sugar  trade. 

I  know  the  firm  of  Sherer  Brothers,  and  I  think  it  is  composed  of  Dr.  Sherer  and  his 
brother  and  a  Mr.  Kingney,  who  was  associated  with  them. 

I  have  not  visited  their  laboratory  since  I  became  connected  with  the  Government. 
I  have  been  at  122  Front  st.  I  have  seen  men  that  I  supposed  were  Turks  come  to  the 
laboratory. 

I  think  that  in  testing  sugar,  a  commodity  which  pays  the  largest  amount  of  duty, 
the  operators  on  the  polariscope  should  be  trained  and  practical  chemists  in  order  that 
the  interests  of  the  Government  be  protected.  I  believe  that  first-class  chemists  should 
be  employed  to  determine  the  value  of  sugar. 

I  believe  the  Government  entitled  to  the  best  ability  that  can  be  had,  and  in  that  way 
the  interests  of  the  Government  and  revenue  are  protected. 

I  have  heard  that  Messenger  Dale  did  loan  money. 

[Note. — Dr.  Battershaw  made  this  statement  under  oath;  but,  immediately  leaving 
on  his  vacation,  was  not  here  to  sign  after  transcription  was  made  by  stenographer.] 

T.  Aubrey  Byrne, 
Special  Treamru  Officer. 

July  23,  1887. 

S.  Ex.  3  62 


56 


FliAUDS  IN  NEW  YORK  CUSTOM-HOUSE, 


Exhibit  119. 

John  F.  Davis,  examined,  connected  with  the  laboratory  at  the  U.  S.  appraiser's 
stores,  states  as  follows: 

Within  the  last  three  years  I  have  not  tested  any  sugars  by  polariscepe.  I  am  called 
upon  sometimes  to  prepare  the  tubes  for  testing  in  cases  of  drawback,  and  never  other- 
wise. 

I  have  heard  that  Dr.  Sherer  was  interested  in  the  manufacture  of  bronze  powder. 
I  saw  in  a  newspaper  over  a  year  ago  a  statement  that  Dr.  Edward  Sherer  was  sued  in 
a  court,  and  that  the  suit  was  thrown  out,  as  the  judge  claimed  no  jurisdiction  on  ac- 
count of  Dr.  Sherer  being  nominally  a  Turkish  subject.  I  have  seen  men  who  were  said 
to  be  Turks  visit  the  laboratory,  and  suppose  they  came  to  see  Dr.  Sherer  as  Turkish 
consul.  I  have  heard  that  there  is  a  firm  of  chemists  down  town  known  as  Sherer  Bros. 
I  know  Mr.  Jas.  Dale,  of  the  sugar  division,  and  have  borrowed  money  of  him,  but 
never  paid  him  any  bonus.  I  have  heard  that  he  does  loan  money  to  employes,  but  not 
within  a  year.    I  have  also  heard  that  he  charged  a  bonus. 

As  a"  chemist,  I  state  that  in  order  to  thoroughly  and  properly  mix  sugars  some  other 
means  in  addition  to  the  mortar  and  pestle  should  be  used;  and  this  is  particularly  so 
when  so*little  time  is  used  in  the  mixing  of  sugar  samples  for  test. 

John  F.  Davis. 

Sworn  to  and  subscribed  before  me  this  19th  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 
Special  Treasury  Officer. 


Exhibit  120. 

William  D.  Crumbie,  employe  in  laboratory,  addressing  Mr.  Byrne,  who  was  about 
to  administer  an  oath,  said: 

Unless  you  are  a  notary  public  I  object,  and  unless  the  questions  and  answers  are  to 
be  taken  down  by  a  stenographer.    I  think  it  is  only  proper  they  should  be  so. 

After  being  satisfied  on  these  points,  and  the  oath  administered  to  him,  said: 

If  asked  the  question  I  would  very  naturally  say  I  belonged  to  the  laboratory  division. 

I  have  tested  sugars  at  the  port  of  New  Haven,  and  still  continue  to  do  so.  I  made 
my  last  test  there  on  the  16th  day  of  June,  I  think. 

1  go  up  there  by  request  of  the  collector  at  New  Haven  to  the  appraiser,  which  is  trans- 
mitted to  me.  The  collector  at  that  port  telegraphs  for  an  examiner  of  sugar;  that  tel- 
egram is  approved  and  sent  to  me  by  the  appraiser  as  my  warrant.  So  far  as  I  know  the 
methods  adopted  in  the  sampling  and  testing  of  sugars  at  other  ports  is  the  same  as  at  this 
port. 

I  know  of  no  difference  in  the  use  of  the  polariscope  at  the  port  of  Philadelphia  and 
this  port.  When  I  put  my  tube  containing  the  liquified  sugar  into  the  polariscope  I  read 
ou  the  scale  a  certain  determination,  and  note  that  determination  as  the  correct  reading 
or  correct  value  of  that  sugar  if  the  polariscope  is  adjusted  properly. 

I  al  ways  test  my  polariscope  with  the  quartz  plate.  I  have  used  refined  sugar.  I  have 
a  quartz  plate  down  there  now.  It  was  there  when  I  went.  I  know  it  is  correct,  as  I 
tested  it  with  refined  sugar.  I  am  certain'  that  my  polariscope  is  properly  adjusted  after 
I  receive  the  quartz  plate.  I  think  I  have  received  a  quartz  plate  from  the  chemist  in 
charge  here  to  test  my  polariscope.  I  am  not  certain,  but  I  think  I  took  one  down  there 
with  me.  The  laboratory  furnished  me  with  that  plate.  I  think  I  told  you  I  took  it. 
I  am  not  positive  whether  I  took  it  out  there  or  not.  I  tested  my  polariscope  a  few 
weeks  ago.  I  used  the  high  plate.  I  think  it  is  81.  I  leave  that  plate  there.  I  think 
there  is  a  quartz  plate  in  this  laboratory  now  that  is  valued  at  99.1.  It  is  not  actually 
mounted — in  a  short  tube,  I  think — only  a  temporary  mounting.  I  don't  recollect  ever 
having  used  it  out  of  its  mounting.  It  is  a  fact  that  the  quartz  plate  is  not  permanently 
mounted.  I  could  not  testify  to  seeing  it  out  of  its  mounting.  Of  course,  never  having 
seen  it  out  of  its  mounting,  I  don't  know  whether  it  is  marked  or  not. 

The  mark  which  indicates  its  value  is,  I  think,  on  the  tube  ou  a  piece  of  paper  pasted 
around  the  tube.  I  will  swear  that  I  don't  think  I  have  ever  seen  the  quartz  plate  with 
a  mark  of  its  value  scratched  on  its  edge,  or  ever  heard  any  conversation  in  regard  to  it. 

No  one  has  ac<  ess  to  the  laboratory  who  is  not  connected  with  the  appraiser's 
store  in  the  general  meaning  of  the  term,  but  there  are  people  who  come  in  there 
through  passes.  It  is  a  presumption  on  my  part.  I  presume  the  watchman  takes 
up  the  passes,    It  is  the  custom  to  ask  any  one  coming  up  the  stairs  their  business, 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE.  57 

and  they  have  to  state  it  to  Captain  Flowers.    He  is  the  clerk  in  the  laboratory 
office.    Dr.  Sherer  is  regarded  as  the  chief  of  the  laboratory,  so  far  as  our  position 
is  concerned  and  attendance  and  disposition  of  the  men. 
Captain  Flowers  in  a  sense  might  be  called  the  watchman. 

I  don't  think  that  I  ever  saw  representatives  of  any  importing  firm  in  the  laboratory 
when  sugars  were  being  tested.  I  am  not  acquainted  with  a  single  one  of  them.  If  I 
do  know  them  I  don't  know  their  names. 

I  do  not  know  a  Mr.  H  ,  Mr.  Jones,  or  Mr.  Drayfoos  by  name.    I  may  know 

them  by  sight.  I  can't  say  positively  that  I  know  a  Mr.  Burt.  I  know  a  man  that  I 
think  is  Mr.  Burt.  I  saw  him  walking  on  this  floor;  I  saw  him  once  going  out  of  the 
building  and  once  coming  in;  I  passed  him. 

I  never  saw  him  in  the  laboratory  nor  in  any  passage  way  leading  to  the  laboratory; 
and  I  think  I  can  say  positively  I  don't  think  that  I  ever  saw  him  with  Dr.  Shearer. 
I  don't  think  I  have  ever  seen  Mr.  Burt  except  these  two  times.  I  may  have  seen  him 
before;  but,  not  knowing  who  he  was,  it  would  have  no  effect  upon  me.  He  is  rather 
a  large  man,  and  I  think  has  a  grey  moustache,  dresses  plainly,  and  rather  plain-going 
in  appearance. 

I  have  heard  that  Mr.  Burt  has  pretty  good  influence  in  the  building  and  is  well  sur- 
rounded with  friends;  I  have  heard  nothing  more  than  rumor  in  that  connection ;  I  have 
heard  nothing  positively.  I  presume  that  the  ]  umoijj^ came  from  the  fact  that  he  is  a 
relative  of  the  naval  officers,  and  perhaps  what  influence  he  has  wo^^ld  come  through 
his  brother. 

A  man  might  naturally  feel  that  Mr.  Burt  could  help  him  through  his  brother's  in- 
fluence; the  avera?  3  man  would  feel  better  to  have  Mr.  Burt's  friendship  than  other- 
wise. 

I  don't  know  V  at  his  presence  here  is  of  daily  occurrence;  I  have  heard  that  he  has 
been  here;  I  have  seen  it  in  the  newspapers  that  he  has  been  here.  I  have  seen  this 
man  twice;  I  have  no  doubt  on  my  mind  but  the  man  I  saw  is  Mr.  Burt. 

I  don't  know  that  it  has  been  brought  directly  to  my  notice  that  Mr.  Burt  has  very 
strong  influence  at  the  appraiser's  store — more  than  I  have  stated — that  his  brother  is 
quite  a  prominent  official,  and  would  naturally  have  more  or  less  influence. 

I  could  not  say  what  the  result  would  be  if  a  man  secured  the  enmity  of  Mr.  Burt;  I 
merely  say,  as  regards  myself,  I  would  rather  feel  friendly  towards  people  who  are  well 
connected  politically  than  I  would  with  enmity,  because  everything  has  got  to  move 
smoothly,  and  it  is  satisfactory  to  a  man  to  have  friends. 

I  have  never  heard  any  conversation  to  the  effect  that  to  be  the  friend  of  Mr.  Burt  is 
to  be  secure  in  your  place.  I  have  never  heard  of  any  one  being  removed  because  he  was 
not  his  friend.  I  have  never  heard  that  Mr.  Burt  had  access  to  all  of  the  rooms  where 
sugar  is  treated.    I  recollect  that  you  (Mr.  Byrne)  once  said  so  when  we  talked  together. 

Mr.  Byrne  reads  his  notes  re.  23rd  December,  '86.  UA  man  might  have  it  in  his  power 
to  tamper  with  sugar  on  the  docks,  more  especially  where  the  samples  are  drawn.  If  a 
sample  has  been  tampered  with  before  I  get  it,  I  can't  tell.  If  a  wet  trier  were  used  I 
would  not  be  anything  the  wiser. 

So  as  to  obtain  a  low  classification  it  might  be  possible  to  select  samples  from  hogs- 
heads, so  that  it  might  be  possible  for  a  polariscopist,  instead  of  reporting  its  true  read- 
ing, to  report  loweror  higher.  That  is,  that  the  polariscopist  can  report  a  lower  or  higher 
reading  than  the  actual  reading  of  his  instrument.  In  cases  of  variation  I  would  take 
the  test  for  classification,  of  the  two,  that  would  read  the  nearest.  In  cases  where  the 
test  would  be  94.3  and  the  second  94.4  and  the  third  94.5?  I  would  not  have  made 
a  third  test  in  that  case;  I  would  take  the  lower  of  the  three. 

If  the  first  test  was  94.4,  and  the  second  94.7,  and  the  third  94.3?  I  would  not  have 
made  a  third  test  in  that  case,  since  94.3  would  have  been  within  the  regulations.  In 
that  case  94.3  would  be  the  test.    There  is  not  always  a  variation  of  three-tenths. 

Our  instructions  are  to  take  the  lowest  of  the  two  tests;  except  when  I  see  that  a  third 
test  is  required,  then  we  take  the  test  of  the  two  that  agree  the  nearest. 

I  don't  say  that  for  the  quartz-plate  three-tenths  can  come  off  legitimately  from  a  test 
of  sugar  without  any  trouble,  I  don't  think  that  three- tenths  would  come  off.  I  would 
interpret  regulation  48  as  meaning  not  more  than  three-tenths  could  come  off.  I  am  not 
willing  to  admit  that  three-tenths  can  be  very  easily  dropped  off  determinations  by  the 
polariscope. 

The  idea  is,  where  two  tests  are  made,  one  92  and  the  other  92.3,  the  regulations  say 
we  should  take  the  lower.  In  that  case  I  would  feel  perfectly  safe  in  taking  the  lower, 
but  I  do  not  mean  that  we  could  take  off  three-tenths  from  the  classification  and  say 
nothing  about  it. 

A  re-test  requires  a  new  sample.  If  we  lost  the  laboratory  test  of  the  sugar  it  would 
simply  mean  another  test. 

I  have  seen  notices  occasionally,  in  which  verifications  of  certain  numbers  were  desired. 
They  were  simply  little  notices  1 '  please  verify  so  and  so, "    I  think  very  often  there  was 


58 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


do  signature.  They  were  some  times  directed  to  Dr.  Sherer,  and  some  times  without  any 
direction  at  all.  I  have  supposed  that  was  caused  by  possibty  some  doubt  in  the  minds 
of  the  gentlemen  of  the  8th  division  regarding  the  actual  test.  I  have  seen  these  slips. 
I  don't  recollect  seeing  a  signature,  although  I  think  I  have  too.  It  was  ex-Assistant 
Appraiser  Frank  Hays,  I  think.  I  can't  say  the  actual  number  of  such  requests.  Some 
one  connected  with  the  actual  work  told  me  that  there  were  twenty  in  a  day.  I  can't 
recollect  about  that  time  who  told  me;  whoever  it  was  would  speak  of  it  as  a  matter  of 
course,  and  without  any  desire  to  tell  me.  A  verification  means  so  much  more  work 
for  the  people  who  are  testing. 

I  do  not  know  why  sugars  are  imported  at  New  Haven  rather  than  New  York.  The  only 
way  that  I  can  account  for  it  is  simply  that  there  is  considerable  molasses  brought  in  on 
the  vessel  and  the  molasses  are  sent  right  out  into  consumption  to  the  immediate  store- 
keepers in  the  town,  and  the  sugar  coming  in  that  way  would  partly  cover  it  up. 

I  can  not  recollect  the  actual  number  of  hoesheads  landed  at  New  Haven  under  the 
new  rate  in  a  cargo,  but  I  don't  believe  it  would  run  over  150  or  160  hogsheads  on  an 
average.    It  might  run  considerably  above  that.    I  would  not  like  to  limit  it. 

I  had  no  talk  with  the  appraiser  before  seeing  you;  I  have  not  seen  him  for  some 
time,  I  think  since  the  10th  June.  He  has  not  talked  to  me  in  regard  to  the  sugar  in- 
vestigation, except  when  you  first  came  here,  then  he  spoke  of  it.  He  had  verv  little 
to  say  about  it.  Whatever  little  talking  there  was  I  presume  1  did  it.  I  think  that 
Mr.  Hinds  came  in  while  we  w<*e  there;  he  did  not  conduct  what  talking  there  was; 
there  was  very  little  of  it,  hardly  enough  to  say  that  there  was  anything  about  it.  I 
mentioned  the  tact  that  I  had  seen  you,  and  that  was  all.  I  told  him  that  iu  a  general 
way.  I  was  impressed  with  the  idea  that  he  did  not  take  very  kindly  to  you.  He  had 
nothing  to  say  about  my  talking  with  you  that  I  recollect,  but  I  recollect  that  he  said 
that  his  office  was  always  open  for  a  proper  investigation.  I  don't  know  that  he  stated 
that  this  was  an  improper  method  of  conducting  an  investigation.  I  don't  know  that 
he  even  intimated  it.  I  am  only  giving  the  impression.  I  don't  think  he  stated  to  me 
or  gave  me  to  understand  that  if  you  were  to  question  me  it  was  to  be  done  in  his  pres- 
ence.   I  don't  recollect  so  stating  to  you — not  in  that  way,  at  any  rate. 

(To  Mr.  Moore  :)  A  week  or  forty-eight  hours  after  that  interview  with  Mr.  Byrne, 
if  he  had  put  those  questions  to  me,  I  would  certainly  answer  them,  as  he  told  me  that 
he  meant  to  submit  a  lot  of  questions  and  he  showed  me  what  authority  he  had. 

Mr.  Byrne.  Did  you  not  inform  me  on  the  23rd  of  December,  '80,  when  I  said  to 
you,  ''Did  you  tell  the  appraiser  that  you  saw  me?"  You  answered  "I  did,"  "for  I 
want  my  superior  olficer  to  know  that  I  am  being  questioned,  and  I  think  the  proper 
way  in  which  your  inquiries  should  be  made  is  through  the  appraiser,  who  said  he  was 
willing  to  afford  you  every  facility  if  you  have  the  authority,"  did  you  say  that  to  me? 

Well,  not  exactly  in  those  words;  at  that  time  I  had  not  received  your  official  com- 
munication. 

I  don't  recollect  the  appraiser  saying  to  me  that  all  conversations  with  you  should  be 
had  in  his  presence.  I  don't  think  he  gave  me  so  to  understand.  I  did  not  know  so. 
I  don't  recollect  having  that  impression  and  expressing  it  about,  when  I  stated  that  I 
did  not  wish  to  talk  anything  about  frauds  in  the  matter  of  sugar  or  in  regard  to  the  use 
of  decolorizing  materials  and  the  treatment  of  sugar  by  the  polariscope.  I  recollect  say- 
ing that  I  was  willing  to  give  you  all  the  information  I  could. 

I  do  not  know  of  any  fraudulent  practice  at  the  present  time  in  the  treatment  of  sugar, 
nor  within  the  past  three  years,  nor  within  the  past  seven  years. 

I  have  been  here  since  1883.  I  have  heard  of  practices  in  the  past — that  is,  that  they 
would  color  sugar — but  that  was  before  I  came  here.  I  never  recollect  ever  making  the 
remarks  "that  it  was  about  time  that  the  frauds  in  sugar  should  be  cut  out,"  "as  bad 
as  a  cancer,"  &c.  I  never  said  that  Mr.  Burt  was  at  the  head  of  the  sugar  ring  or  eon- 
nected  with  it,  or  that  there  was  a  ring,,  or  that  I  had  any  information  to  lead  the  Gov- 
ernment to  discover  that  there  was  a  sugar  ring. 

I  know  Colonel  Ayers.  I  saw  him  frequently  in  the  laboratory  in  conversatioD  with 
Dr.  Sherer.  He  came  io  quite  often,  and  I  thought  nothing  of  it.  I  did  not  know  that 
he  was  the  special  agent  to  look  after  sugar.  I  was  under  the  impression  that  he  had 
considerable  to  do  with  it.  I  saw  nothing  strange  in  his  presence.  Special  agents  often 
came  in.  I  could  not  say  that  any  of  them  devoted  such  special  attention  to  the  labora- 
tory as  Col.  Ayer.  I  suppose  Col.  Ayer  was  there  a  little  more  than  the  rest,  but  I 
never  paid  any  special  attention  to  it.  He  was  an  officer  of  the  Department,  and  1  would 
not  pay  any  attention  to  it.    I  don't  recollect  seeing  him  there  with  Mr.  Burt. 

I  don't  know  that  General  Bierne  was  engaged  upon  the  investigation  of  sugar.  I 
don't  know  what  he  came  into  the  office  for;  sometimes  it  was  for  one  thing  and  some- 
times another.  I  heard  him  speaking  to  Dr.  Battershall  about  various  chemical  things. 
I  don't  recollect  any  particular  case  now.  ^Sometimes  special  agents  come  in  there  and 
have  a  chat.  I  have  seen  Colonel  Ayers  and  Dr.  Sherer  talking  together  on  several  oc- 
casions, 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE.  59 

I  do  not  recollect  having  seen  them  together  outside  of  the  building  except  possibly 
at  the  entrance,  but  never  away  from  it.  I  never  saw  them  coming  in  or  going  away  to- 
gether. 

I  do  not  know  who  drew  the  regulations.  I  think  Dr.  Sherer  had  a  hand  in  it,  and  I 
have  heard  that  Col.  Ayer  had.    I  do  not  know,  nor  never  heard  that  Mr.  Burt  had. 

I  don't  recollect  hearing  that  any  other  sugarman  had  a  hand  in  it. 

I  do  not  know  that  any  differences  exists  in  the  classifications  of  sugar  between  New 
York  and  Philadelphia. 

I  have  never  heard  much  about  whether  New  York  pays  a  higher  or  lower  average 
duty  on  sugar  than  Philadelphia. 

I  saw  Dr.  Sherer  to-day.  He  gave  me  no  instructions.  He  did  not  suggest  to  me  to 
demand  stenographic  notes.  He  said  a  day  or  two  ago  that  he  felt  that  a  stenographer 
ought  to  be  provided  and  I  said  at  the  time  that  I  thought  so  too. 

To  Mr.  Moore: 
He  did  not  suggest  to  me  to  demand  Mr.  Byrne's  authority. 

If  you  had  asked  me  any  questions  I  would  not  have  hesitated  to  answer  you.  I  don't 
know  what  put  it  into  my  head  to  question  Mr.  Byrne's  authority. 

I  think  Dr.  Sherer  spoke  about  demanding  Mr.  Byrne's  authority,  and  suggested 
stenographic  notes.  I  don't  know  whether  I  spoke  of  it  myself  or  not.  I  think  I  did. 
The  reason  I  spoke  about  being  put  on  oath  was  to  make  the  thing  legal  all  through. 

I  don't  know  that  demanding  the  authority  and  stenographic  notes  was  talked  over. 

I  got  the  impression  that  Dr.  Sherer  was  going  to  ask  lor  a  stenographer.  In  fact  he 
said  so,  and  I  suppose  it  might  be  construed  that  he  so  advised  every  other  person. 

My  reason  for  demanding  the  stenographic  notes  was  that  I  could  see  if  I  was  correctly 
reported. 

I  did  not  see  the  letter  that  Dr.  Sherer  sent  to  the  appraiser  with  regard  to  the  ste- 
nographer. I  saw  a  letter  from  the  appraiser  to  Dr.  Sherer  in  which  he  said  that  you  had 
come  prepared  to  hold  an  investigation.  It  was  addressed  to  Dr.  Sherer.  I  think  there 
were  some  sort  of  instructions  in  it. 

I  read  the  letter  from  the  appraiser  to  Dr.  Sherer  which  stated  that  Mr.  Byrne  and 
Special  Agent  Moore  were  to  make  an  investigation  into  the  importation  of  sugar  at  the 
port  of  New  York.  I  simply  read  it  over  generally  and  saw  what  it  was.  I  consider 
myself  an  employe  directly  or  indirectly  upon  sugar  matters.  There  was  no  suggestion 
in  the  letter  sent  by  the  appraiser  to  Dr.  Sherer  as  to  the  scope  of  the  investigation  that 
you  might  make,  further  than  to  sampling,  testing,  and  classification  of  sugars. 

When  Dr.  Sherer  showed  me  the  letter  he  simply  said  it  was  a  notice  he  had  received. 
I  don't  recollect  that  he  said  he  was  going  to  do  anything  at  that  time;  since  that  time 
he  said  that  he  was  going  to  ask  for  a  stenographer,  or  had  asked  for  one.  I  think  that 
was  when  the  question  of  a  stenographer  first  came  up.  I  have  no  knowledge  of  mat- 
ters that  would  be  of  information  to  %the  Secretary  and  explain  to  him  how  the  service 
might  be  improved  at  this  port  so  far  as  relates  to  sugar.  I  have  thought  sometimes  that 
the  regulation  calling  for  over  25  per  cent,  out  of  the  packages  is  not  sufficient  in  many 
cases.  I  don't  know  whether  it  would  be  practicable  to  make  a  larger  sample,  but  it 
seems  to  me  that  a  larger  sample  would  be  better.  I  had  always  supposed  the  sampling 
of  sugar  was  conducted  in  this  way:  A  vessel  arriving  at  the  port  with  a  cargo  would 
have  a  certain  number  of  packages  under  a  certain  mark,  and  it  seems  to  me  it  would 
be  better  to  have  a  larger  sample  than  25  per  cent. ;  I  should  suppose  that  100  per  cent, 
would  be  better.    It  seems  to  me  that  a  sample  from  each  hogshead  would  be  better. 

It  would  be  fairer  to  the  importer  and  to  the  Government. 

The  sample  of  sugar  we  get,  we  know  nothing  outside  of  that  sample.  If  that  sample 
is  a  true  one  so  much  better  for  the  Government  and  so  much  the  better  for  the  importer. 
But  if  it  should  not  be  a  true  one  the  Government  is  bound  to  be  defrauded  or  the  im- 
porter is  bound  to  be  defrauded. 

No  one  had  any  talk  with  me  connected  with  this  department  except  Mr.  Hinds,  and 
that  was  when  I  met  him  in  the  appraiser's  office,  and  he  thought  at  that  time  that  you 
had  not  the  necessary  authority — about  the  time  that  I  saw  you.  about  the  20th  of  De- 
cember, I  think.  That  was  all  there  was  about  it;  he  simply  questioned  your  authority. 
What  he  said  before  the  appraiser  amounted  simply  to  his  saying  that  he  didn't  think 
you  had  any  authority.  I  think  I  told  him  I  had  seen  your  written  authorization,  and 
I  think  he  said  that  he  had  not  seen  it,  and  the  impression  on  my  mind  was  that  inas- 
much as  he  had  not  seen  it  that  I  had  better  not  talk  with  Mr.  Byrne  about — in  other 
words,  he  might  have  doubted  your  statement.  When  I  told  him  I  had  seen  the  state- 
ment of  the  Secretary  authorizing  the  investigation  I  think  he  questioned  it. 

I  have  no  knowledge  of  Mr.  Byrne  being  shadowed  by  anybody  connected  with  the 
appraiser's  office,  nor  did  I  hear  of  it.    This  is  the  first  I  heard  of  it. 

I  have  heard  that  you  were  at  the  custom-house  and  was  working  an  investigation 


60 


FfcAUDS  In  ttav  yo&r  custom-house. 


there,  and  that  you  seemed  to  be  doing  a  great  deal  of  writing  and  going  over  the  rec- 
ords. Dr.  Sherer,  I  think,  told  me.  It  may  have  been  that  1  asked  him  whether  you 
were  still  working  or  had  got  through.  I  had  a  conversation  with  him  relative  to  your 
work.    On  several  occasions  he  talked  to  me  about  the  sugar  investigation. 

I  saw  Dr.  Sherer  within  a  day  or  two  alter  the  day  1  walked  down  town  with  you, 
and,  as  I  told  you  that  day,  I  intimated,  after  you  asked  me  to  say  nothing  about  it, 
that  I  did  not  propose  to  keep  quiet,  and  I  told  the  appraiser,  and  I  think  he  saw  Dr. 
Sherer,  and  to  the  best  of  my  recollection  there  was  nothing  .said  about  it  lor  some 
time;  but  eveu  to  this  day  1  have  never  told  them  everything;  1  did  not  ques.ion  the 
wisdom,  but  I  gave  my  word  to  Mr.  Byrne  that  1  would  not.  After  the  appraiser  men- 
tioned the  matter  I  thought  there  was  no  reason  for  my  reticence;  the  subject  has  been 
mentioned  several  times  between  us. 

I  have  no  statement  that  I  wish  to  make,  only  this,  that  at  the  beginning  of  this  in- 
vestigation I  had  no  intention  of  being  discourteous  to  any  person. 

I  saw  a  letter  bearing  upon  the  matter  of  employes  engaged  in  the  sampling  and 
testing  and  classification  of  sugars  at  the  appraiser's  store,  in  the  hands  of  Dr.  Sherer. 

1  know  Mr.  Flowers.  1  think  that  he  ranks  as  a  sampler.  He  is  employed  in  doing 
the  clerk  work  at  the  laboratory.  I  believe  that  a  Mr.  Bowne  is  a  superintendent  of 
samplers.  I  don't  know  Seymour.  1  know  J.  F.  Davis,  his  duties  are  examiner;  he 
is  engaged  on  opiums.  I  don't  think  he  has  any  connection  with  sugars  since  1883.  1 
think  I  heard  him  say  he  was  a  sampler  several  years  ago.    That  is  J.  F.  Davis. 

While  I  am  not  at  the  present  time  engaged  on  sugar,  I  have  been  in  the  past,  and 
likely  to  be  at  any  time. 

It  is  a  recognized  fact  in  the  laboratory  here  that  the  polariscopic  tests  at  Boston  have 
been  higher  than  at  this  port.  I  think  there  is  an  impression  here  that  Mr.  Leary  reads 
his  polariscope  too  high  at  tunes  on  his  comparative  tests. 

I  think  it  is  attributed  more  to  incompetency  than  to  fraud.  I  have  taken  the  same 
sample  of  sugar,  aud  in  the  percentage  of  water  there  ought  to  be  a  closer  agreement 
than  there  is. 

I  think  that  the  impression  prevails  that  New  York  is  right  and  Boston  is  wrong  as 
regards  the  use  of  the  polariscope.  , 

I  know  Jas.  G.  Dale;  he  belongs  to  the  eighth  division;  he  is  in  the  habit  of  loaning 
money;  my  impression  about  his  rates  of  interest  is  that  he  is  not  over  modest;  I  could 
not  say  the  amount  he  charges  is  bonus  or  interest. 

I  don't  know  whether  Dr.  Baker  read  the  polariscope  in  the  laboratory.  I  don't  think 
he  ever  stated  that  the  polariscope  is  wrong;  that  he  read  it  different  from  what  it  was 
set.    I  think  he  has  read  a  quartz  plate,  but  what  his  reading  was  I  don't  know. 

Wm.  D.  Crumbie. 

Sworn  and  subscribed  to  before  me  this  7th  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 
9  Special  Treasury  Officer. 

Witness  to  above. 

H.  A.  Moore, 

Special  Agent. 


Wm.  D.  Crumbte,  an  employe  of  the  U.  S.  laboratory,  again  called  before  me  on 
this  7th  day  of  July,  A.  1).  1887,  makes  the  fallowing  statement: 

That  on  leaving  the  examination  room  when  I  first  appeared  before  you,  aud  upon 
my  return  to  the  laboratory,  Dr.  Sherer,  the  chief  chemist,  asked  me  if  I  had  been  sworn, 
and  when  I  replied  in  the  affirmative,  he  laughed,  and  1  told  him  and  Capt.  Flowers, 
who  was  present,  that  1  could  say  nothing  on  the  subject,  as  I  was  under  oath. 

Wm.  D.  Crumbie. 

Sworn  aud  subscribed  to  before  me  this  7th  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 
Special  Treasury  Officer. 
Witness  to  the  above.  . 
H.  A.  Moore, 

Special  Agent. 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


Gl 


Exhibit  121. 

July  18,  1887. 

Ernest  J.  Chapman,  messenger  to  the  laboratory,  under  oath  declares  as  follows: 

I  originally  entered  the  service  at  the  Varick-street  laboratory,  on  or  about  August, 
1880,  as  office  boy  to  Dr.  Sherer,  chemist  in  charge.  About  Nov.,  1883,  I  was  appointed 
messenger  to  the  present  laboratory  at  a  compensation  of  $840  per  annum. 

I  was  removed  in  July,  1885,  by  Appraiser  McMullen,  so  far  as  I  know  for  political 
reasons.  I  was  reappointed  messenger  in  October,  1885,  at  same  salary — $840  per  an- 
num, and  this  position  I  hold  to-day. 

My  assignment  is  to  assist  Dr.  Baker,  who  has  immediate  charge  of  the  classification 
of  aualines,  wools,  dye-stuffs,  etc. 

I  am  22  years  of  age.  I  have  picked  up  my  knowledge  of  chemistry  in  the  U.  S. 
laboratory. 

I  sometimes  take  the  place  of  a  polariscopist  who  may  be  absent,  and  under  direc- 
tion of  Dr.  Sherer  I  test  sugars;  he  or  Examiner  Abbott  supervises  my  work. 

The  last  time  I  tested  sugars  for  any  continuous  period  was  during  the  absence  of 
Examiner  Morse  for  two  weeks  and  thereabouts;  this  was  during  the  present  month 
(July,  1887),  when  Mr.  Examiner  Morse  was  absent  on  his  vacation.  At  odd  times  I 
am  called  by  Dr.  Sherer  to  take  the  place  of  any  absentee  in  the  sugar  laboratory. 

I  do  not  know  how  to  adjust  a  polariscope.  1  do  not  know  how  to  use  a  quartz  plate. 
The  polariscope  that  I  use  is  always  adjusted  for  me  by  the  chemist  in  charge. 

I  weigh  and  otherwise  prepare  sugar  solutions.  When  I  am  not  employed  in  the 
sugar  laboratory  I  am  engaged  on  Dr.  Baker's  work. 

Sometimes,  in  the  absence  of  Capt.  Flower's  clerk  of  the  laboratory,  I  make  out  sugar 
certificates  of  polarizations.    I  have  carried  these  certificates  to  the  sugar-room. 

When  I  am  testing  sugars  I  always  work  in  duplicate — with  another  polariscopist. 

Dr.  Sherer  or  Examiner  Abbott  invariably  verify  my  readings  when  they  do  not  cor- 
respond within  three-tenths  of  one  degree  of  the  reading  of  the  duplicate. 

The  rule  of  the  laboratory  is  that  if  one  reading  showed  89.9  and  the  duplicate  read 
90.1,  then,  in  my  opinion,  the  89.9  would  he  accepted  as  the  test  for  classification  as  per 
regulation,  because  the  variance  did  not  exceed  (3)  three-tenths. 

I  know  that  requests  for  "re-tests  "  and  "verifications  "  are  often  sent  to  the  labora- 
tory. 

I  do  not  know  Mr.  Dreyfous  by  name;  neither  do  I  know  that  he  is  a  sugar  broker. 
I  never  saw  Broker  Burt  in  the  laboratory;  I  do  uot  know  what  sugar  firm  or  refinery 
he  represents;  I  have  seen  the  man  I  think  is  Broker  Burt  in  the  appraiser's  store,  but 
when  I  can  not  remember.  I  have  seenSpl.  Agent  Ayer  often  talking  with  Dr.  Sherer 
when  he  was  stationed  here  in  New  York. 

I  know  Mr.  James  Dale,  employe  8th  div. ;  he  brings  sugar  samples  and  requests  for 
re-tests  to  the  laboratory  from  the  sugar-room.  1  have  heard  from  my  associates  in  the 
laboratory  that  Mr.  Dale  loans  money  to  the  employes;  I  never  heard  that  he  charged 
any  specific  rate  of  interest;  I  have  heard  of  his  taking  compensation  for  making  loans; 
I  have  heard  that  he  has,  in  some  instances,  taken  pretty  stiff  rates. 

I  think,  in  one  instance,  Dr.  Sherer  told  me  that  Dale  had  got  from  him  a  pretty  stiff 
rate;  I  could  not  say  that  no  one  else  had  informed  me  to  the  same  effect. 

I  have  carried  word  or  messages  to  122  Front  street,  Sherer  Bros',  laboratory,  from  Dr. 
Sherer;  I  could  not  tell  the  word  or  messages  I  took;  I  can  not  swear  that  I  was  or  was 
not  at  the  laboratory  of  Sherer  Bros.,  122  Front  street,  this  city,  inside  of  two  years. 

I  know  that  William  liisney  was  at  one  time  employed  at  the  laboratory  of  Sherer 
Bros. 

I  never  heard  that  Dr.  Sherer  was  at  any  time  making  a  bronze  powder. 

I  knew  that  Dr.  Sherer  was  Turkish  consul,  and  as  far  as  I  know  he  is  at  the  present 
time.  I  do  not  remember  seeing  any  Turks  call  upon  Dr.  Sherer  at  the  laboratory  since 
last  winter,  but  prior  to  that  time,  at  long  intervals,  one  or  two  did  call  upon  him. 

As  a  general  rule,  certificates  of  tests  of  sugars  made  are  sent  to  the  sugar  room  on  the 
same  day;  otherwise  they  would  be  sent  in  the  first  thing  the  next  morning. 

I  sometimes  make  deposits  for  Dr.  Sherer  at  the  People's  Bank,  corner  Canal  and 
Thompson  streets,  this  city.  When  requests  for  re-tests  are  sent  to  the  laboratory  they 
are  written  on  slips;  i.  e.,  "  Please  verify  the  following,  3541,  3442,  3543,  etc.,  etc.," 
these  being  the  numbers  on  the  samples  tested  that  day  or  a  few  days  before.  Some- 
times these  requests  have  been  signed  by  Examiner  Remsen.  I  do  not  remember 
whether  all  the  requests  are  signed. 

Ernest  J.  Chapman. 

Sworn  and  subscribed  before  me  this  18th  day  July,  1887. 

T.  Aubrey  Byrne, 

Spl.  Treasury  Officer* 


62 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


Exhibit  124. 

New  York,  July  13,  1887. 

Henry  J.  Abbott,  sugar  chemist  in  laboratory,  states  as  follows: 

In  1878  I  was  aware  of  irregularities  in  the  matter  of  colored  sugars,  and  was  employed 
by  the  Government  to  help  prevent  and  detect  the  same.  Since  the  polariscope  has  been 
in  use  by  me,  which  has  been  for  live  years  previous  io  the  Jaw  authorizing  its  use,  I 
used  it  to  detect  the  strength  of  sugars  which  had  been  colored  down  to  evade  Dutch 
standard  classification.  I  am  not  a  graduated  chemist,  but  have  been  taught  the  use  of 
the  polariscope  by  a  chemist. 

In  case  a  sample  tested  96.1  and  then  again  tested  96.6  a  re  test  would  be  necessary, 
and  supposing  there-test  now  necessary  should  be  96.4,  then  the  test  96.4  would  be  taken. 
The  rule  of  the  laboratory  is  duplicate  tests  required  by  regulation,  and  more  tests  are 
made  in  cases  of  disagreement. 

We  use  the  three-tenth  latitude  by  regulation  par.  35  in  reporting  our  tests.  Some- 
times tests  read  over,  repeat  themselves  thus,  89.1,  89.1,  but  I  would  not  swear  by  that 
one-tenth.  They  very  often  repeat  themselves  as  88  2,  88.2,  but  the  variance  in  read- 
ing between  the  first  and  second  reading  would  be  more  often  three-tenths  up  or  down. 

This  relates  to  the  reading  of  tests  and  re-tests,  and  applies  to  low-grade  sugars  par- 
ticularly. The  reason  of  this  is  that  these  low-grade  sugars  mixed  for  the  tube  have  a 
peculiar  color,  which  influences  the  solution.  We  have  no  method  of  removing  that 
color,  hence  tests  vary  sometimes  in  the  reading  from  3  to  5  tenths  of  a  degree.  Centrif- 
ugal sugars  tested  do  not  vary  more  than  from  1  to  2  tenths,  so  that  one-tenth  or  two- 
tenths  of  a  degree,  when  reading  a  solution  of  centrifugal  sugar,  is  an  important  factor  in 
determining  the  rate  of  duty  to  be  assessed.  I  will  not  swear  by  one-tenth  as  to  accuracy. 
The  color  of  the  solution,  to  my  eye,  should  be  an  orange-green,  in  order  to  read  my  po- 
lariscope most  accurately.  A  dark  yellow  color  of  solution  is  hard  to  read.  All  chemists 
have  different  colors  which  suits  their  eye  best  to  read  by.  I  am  in  charge  of  the  lab- 
oratory when  Dr.  Sherer  is  not  there,  which  occasionally  occurs.  Employes  of  the  8th 
division  who  visit  the  laboratory  are  Examiner  Remsen,  Messenger  Dale,  Examiner 
Bowne,  and  the  laborers  in  the  sugar- room  who  bring  the  samples  up.  Mr.  Dale  usually 
brings  the  requests  for  re- tests,  and  sometimes  the  samplers  and  examiners  visit  the  lab- 
oratory. 

I  do  not  know  of  a  case  where  any  outsider  has  visited  any  one  in  the  laboratory. 
Mr.  Frankenstein  does  not  and  has  not  been  in  the  laboratory  in  two  years  to  my  knowl- 
edge. There  have  been  a  few  cases  where  men  of  Turkish  nationality  have  called  to  see 
Dr.  Sherer  at  the  laboratory.  Dr.  Sherer  used  to  be  Turkish  consul,  but  I  do  not  know 
whether  he  is  at  present.  I  have  seen  Mr.  Jas.  Burt,  sugar  broker,  in  the  laboratory 
with  Spl.  Agt.  Ayer  some  time  ago,  but  do  not  recollect  seeing  him  since.  I  know  that 
the  sugar  regulations  were  drawn  up  by  Spl.  Agt.  Ayer,  assisted  by  Dr.  Sherer,  and  I 
also  assisted.  I  have  no  doubt  but  that  Mr.  Jas.  Burt  had  something  to  say  to  Spl. 
Agt.  Ayer  about  the  drawing  up  of  the  regulations.  I  have  heard  them  in  conversation 
about  them.  Mr.  Burt  liked  to  have  his  oar  in,  and  I  think  he  always  does  have  more 
or  less  to  say  about  sugar  matters,  when  he  can.  I  found  him  upon  one  occasion  some 
time  ago,  when  the  laboratory  was  located  on  Hudson  street,  perusing  surreptitiously  in 
the  laboratory  my  official  letter- book,  at  the  time  I  was  working  on  colored  sugars  in 
which  he  was  interested.  While  I  am  not  exactly  prepared  to  say  he  read  anything  in 
it,  it  was  where  he  could,  and  not  in  the  place  where  I  left  it  the  night  before,  thereupon 
we  had  some  very  sharp  words. 

I  have  seen  Mr.  Burt  and  Dr.  Sherer  occasionally  in  conversation  in  the  hallways  of 
the  building.  In  my  judgment  probably  10  per  cent,  of  the  samples  that  come  to  the 
laboratory  are  verifications  of  tests  already  made.  These  requests  for  verification  come 
from  Examiner  Remsen,  but  would  not  be  made  by  him  unless  requested  to  do  so  by  the 
sugar  importers  or  their  brokers.  I  do  not  know  what  the  percentage  of  work  is  arising 
from  re-tests,  as  they  come  to  the  laboratory  as  original  samples,  but  we  sometimes  think 
we  recognize  the  sugar  that  we  have  passed  on  but  an  hour  or  two  before,  and  a  com- 
mon remark  in  the  labratory  in  such  cases  is,  "  I  suppose  this  is  some  of  Burt's  sugar," 
as  we  all  understand  that  he  is  never  satisfied,  and  makes  determined  effort  to  get  as 
low  test  as  possible.  I  have  occasionally  visited  the  sugar-room,  and  I  think  it  would 
be  a  good  plan  to  have  the  sample  cans  washed  and  dried  in  a  separate  room,  free  from 
moisture. 

I  bought  my  Scheibler  polariscope  in  1879.  At  that  time  I  tested  it  with  C.  P.  sugar, 
and  found  its  scale  to  be  correct  from  50  to  100.  I  daily  read  my  quartz  plate  in  my  in- 
strument, to  see  that  nothing  has  thrown  the  same  out  of  adjustment  and  to  test  theac- 
curacy  of  my  eye. 

We  have  in  our  laboratory  two  ouartz-plates  marked  96  and  99£.    My  instrument  to- 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


G3 


day  is  four-tenths  low  to  my  eye,  so  that  I  add  four-tenths  to  every  reading  of  a  test  to- 
day. One  of  these  quartz-plates  (the  91).])  was  tested  by  Dr.  Gideon  E.  Moore,  by  means 
unknown  to  me,  and  the  correctness  of  its  value  certified  to  by  him,  as  J  have  heard,  al- 
though I  have  never  seen  the  certificate.  I  understood  Dr.  Sherer  to  say  that  he  had 
the  certificate.  I  have  never  seen  any  mark  which  indicated  the  value  of  this  quartz- 
plate,  except  on  a  piece  of  paper  pasted  on  the  tube,  written  by  some  one  in  the  labo- 
ratory, or  perhaps  by  Dr.  Sherer  himself.  The  reason  of  my  instrument  being  four- 
tenths  low  to-day  was  because  some  one  had  evidently  tampered  with  it  after  I  left  the 
office  yesterday. 

Mr.  Cole  and  Mr.  Smiley,  messengers  in  the  laboratory,  do  the  breaking  up  of  the 
samples  and  mixing  them  before  they  go  to  the  scales.  Each  reader  of  a  polar iscope, 
except  Mr.  Morse,  reads  his  own  polar  iscope.  The  latter  is  unable  to  do  so,  presumably 
from  defective  eyesight. 

H.  J.  Abbott. 

Sworn  and  subscribed  to  before  me  this  13  day  of  July,  A.  D.  1887. 

T.  Audrey  Byrne, 
Special  Treasury  Officer. 


New  Yoek,  July  26,  1887. 

H.  J.  Abbott,  sugar  examiner  and  polariscopist,  further  states  as  follows: 

I  think  that  after  my  examination  before  you  I  remarked  to  Dr.  Sherer  or  somebody 
else  that  I  did  not  like  the  idea  of  the  answers  being  taken  down  without  the  questions, 
and  that  I  considered  it  an  unfair  way  of  doing.  I  was  dissatisfied  with  myself  forsign- 
ing  my  evidence  without  the  questions. 

At  this  examination  1  have  heard  Mr.  Byrne  state  that  it  was  by  the  direction  of  the 
Hon.  Secretary  of  the  Treasury  that  the  questions  were  not  to  be  incorporated  in  the 
testimony;  but  I  only  have  Mr.  Byrne's  statement  for  the  fact,  and  I  still  think  that 
the  questions  should  be  incorporated  with  the  answers,  as  I  do  not  consider  it  a  fair  way 
of  doing. 

I  consider  that  I  have  been  courteously  treated  by  you  gentlemen. 

H.  J.  Abbott. 

Sworn  to  and  subscribed  before  me  this  2Gth  day  of  July,  A.  D.  1887. 

T.  Aubrey  Bytrne, 
Sjjecial  Treasury  Officer. 


Exhibit  125. 

Stephen  V/.  Bassett,  stenographer  to  appraiser,  states  as  follows: 

I  am  stenographer  to  the  appraiser.    I  have  read  the  Secretary's  orders  under  date  of 
July  1st,  addressed  "to  any  officer  or  employ 6  at  the  appraiser's  store,  New  York." 
I  have  subscribed  to  the  oath. 

I  recognize  the  orders  of  the  Secretary;  but  Mr.  McMullen  is  my  chief,  and  I  am  also 
responsible  to  him. 

I  don't  know  whether  I  will  answer  that  question  just  now  at  all  (to  observe  silence); 
I  have  already  said  that  the  letter  of  the  Seeretary  there  is  binding,  and  that  1  understood 
that  part  of  it,  and  appreciate  it.  Of  touise  1  say  that  I  am  not  going  to  do  anything 
tli at  is  against  the  orders  of  the  Secretary. 

If  the  appraiser  should  ask  me  anything  in  regard  to  this  examination  1  think  I 
would  tell  him.  I  want  to  state  that  the  appiaiser  would  never  ask  any  such  questions; 
the  appraiser  does  not  go  round  asking  questions  of  what  has  occurred  or  anything  of 
that  kind. 

Of  course  I  would  not  keep  anything  from  the  appraiser. 

I  want  to  state  that  after  reading  the  fe(  retary's  letter  again,  that  I  simply  wish  to 
state  that  I  shall  be  governed  by  that  letter,  that  is  all. 

I  write  the  letters  of  the  appraiser.  The  appraiser  dictates  a  great  many  letters.  I 
decline  to  answer  whether  or  not  he  invariably  dictates  his  own  letters. 

The  three  letters  bearing  date  15th  July  were  dictated  to  me  by  the  appraiser,  and 
addressed  to  Mr.  T.  Aubrey  Byrr.e.  There  ate  letters  sometimes  dictated  by  Special 
Agent  Hindes  for  the  appraiser's  signature.  Where  there  are  things  of  that  kind  done, 
it  is  done  by  direction  of  the  appraiser,  and  he  directs  what  shall  be  said;  he  directs 
Mr.  Hindes  what  to  say. 


64 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


Now  and  then  there  is  a  letter  written  by  Mr.  Hinds  where  the  appraiser  has  a  thou- 
sand other  things  to  do;  the  letter  is  written  as  he  directed,  then  it  is  signed.  I  don't 
remember  whether  any  letters  have  been  returned  to  me  disapproved  by  the  appraiser. 
I  refer  to  such  letters  as  were  dictated  by  Special  Agent  Hinds.  I  can  not  say  who  dic- 
tated the  letter  addressed  to  you  (Mr.  Byrne)  under  date  of  June  27th,  but  I  think  the 
appraiser  dictated  that  letter.  In  everything  pertaining  to  this  examination  I  think 
the  appraiser  has  dictated  the  letters,  so  far  as  those  I  have  written.  Special  Agent 
Iliuds  has  never  been  present  when  any  letters  addressed  to  you  by  the  appraiser  have 
been  taken  by  me  stenographically. 

I  take  orders  from  no  man  except  the  appraiser.  I  have  written  letters  from  Mr. 
Hindes'  dictation. 

I  do  know  Col.  James  Burt  when  I  see  him.  I  have  heard  that  he  is  a  sugar-broker. 
I  have  seen  him  in  the  appraiser's  office.  I  have  seen  Col.  Burt  probably  two  or  three 
times.  Probably  I  have  seen  Mr.  Burt  sitting  at  the  desk  with  the  appraiser.  I  have 
never  written  a  letter  dictated  jointly  by  the  appraiser  and  Mr.  Burt.  I  am  sorry  to 
say  I  was  stenographer  to  Appraiser  Ketchum.  I  am  sorry  that  I  ever  knew  him,  or 
ever  saw  him. 

My  relations  with  the  appraiser  are  official,  and  everything  that  the  appraiser  does  is 
done  (*)  openly  and  overboard,  so  that  there  is  no  necessity  for  having  any  relations  of  a 
confidential  or  secret  character. 

I  want  to  say  that  the  Secretary's  orders  or  request  shall  be  strictly  obeyed;  at  the 
same  time  Mr.  McMullen  is  my  chief  and  that  I  know  Mr.  McMullen  would  not  come 
to  me  and  ask  me  what  has  occurred  in  this  room  or  what  I  testified.  If  he  does  come, 
then  I  will  let  you  know. 

There  is  no  intention  on  my  part,  and  I  have  no  desire  to  violate  the  Secretary's  orders. 

The  change  made  in  the  last  line  of  page  three  is  made  at  my  request.  [The  word 
"done,"  marked  with  (*)  was  originally  "dictated." — Printer.] 

S.  W.  Bassett. 

Sworn  and  subscribed  before  me  this  20th  day  of  July,  1887. 

T.  Aubrey  Byrne, 

Spl.  Treasury  Officer. 


Stenographer  Bassett  came  deliberately  into  the  examination-room  without  knock- 
ing, and  pending  the  examination  of  Examiner  Remsen  and  Jacobs,  and  in  the  presence 
of  those  gentlemen,  Special  Agent  H.  A.  Moore,  Clerk  Ormiston,  Stenographer  Kerr, 
and  myself,  and  in  a  loud,  discourteous,  and  ungentlemanly  manner  made  the  following 
statement,  without  any  preliminary  remark  or  request  that  he  would  like  to  disturb  the 
investigation  momentarily: 

"  I  want  you  to  change  that  statement  that  I  made  and  put  in  the  questions  as  you 
made  them,  and  my  replies,  as  the  way  you  have  it  is  not  a  fair  statement." 

I  asked  him  to  make  his  statement  so  that  the  stenographer  could  take  it,  and  he 
said  "that  was  all  there  was."  Special  Agent  Moore  then  said,  "  Mr.  Bassett,  this  is 
hardly  a  fair  way  to  present  your  statement  to  the  Commission."  To  which  he  replied 
to  this  effect,  "that  he  did  not  propose  to  be  bulldozed." 

He  was  told  that  his  remarks  would  be  presented  to  the  Secretary  of  the  Treasury, 
and  he  said  that  he  did  not  care,  or  words  to  that  effect. 

T.  Aubrey  Byrne, 

Spl.  Treasury  Officer. 

The  above  is  a  true  statement. 

H.  A.  Moore, 

Special  Agent. 

H.  W.  Kerr, 

Stenographer. 
Robert  McGregor  Ormiston. 
A.  G.  Remsen, 

Sugar  Examiner. 

Mr.  William  C.  Jacobs  refuses  to  sign. 

U.  S.  Appraiser's  Store, 

New  York,  July  22,  1887. 


I 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE.  65 


Exhibit  126. 

New  Yoek,  July  12,  1887. 

Geoege  M.  Anderson,  opener  and  packer,  detailed  as  clerk,  states  as  follows: 

My  especial  duties  are  to  receive  the  sugar  invoices  from  the  invoice  bureau  before 
classification  has  been  made.  I  enter  them  on  my  invoice  book  as  follows:  Name  of  im- 
porter, vessel,  invoice  No.,  entry  No.  When  I  enter  upon  the  sampler's  slip  the  name 
of  importer,  name  of  vessel,  number  of  packages,  kind  of  sugar,  dock  where  vessel  is,  and 
marks  and  numbers,  which' go  to  the  sugar-room. 

As  soon  as  classification  has  been  made,  the  invoices  are  returned  to  me  to  be  sent  to 
the  invoice  bureau,  whereupon  I  make  the  proper  records  in  my  book. 

Sometimes  Mr.  Johnson  and  Mr.  Trainer  have  come  to  me  to  obtain  from  my  books 
information  as  to  invoices  at  the  request  of  the  sugar  brokers.  Mr.  Trainer  and  Mr. 
Johnson,  usually  came  to  me  when  inquiries  were  to  be  made  for  Mr.  Burt's  invoices. 
There  were  less  inquiries  made  of  me  for  information  as  to  Mr.  Burt's  invoices  from  the 
fact  that  his  work  is  pretty  well  kept  up  by  Mr.  Trainer  and  Mr.  Johnson.  Mr.  Drey- 
foos  usually  obtains  his  information  through  them  also.  Information  for  Mr.  Burt,  rela- 
tive to  imporations  of  sugar,  memorandums,  classification,  etc.,  are  left  in  the  invoice 
blotter  for  Mr.  Burt's  inspection.  Mr.  Burt  visits  the  division  nearly  every  day.  In- 
formation for  other  brokers  such  as  tests,  classifications,  etc. ,  are  sometimes  laid  on  Mr. 
Trainer's  desk  for  the  information  of  other  brokers. 

Occasionally  I  have  heard  Mr.  Burt  and  Examiner  Bowne  wrangling  in  a  loud  tone 
of  voice  about  their  tests  when  Mr.  Hay  was  ass' t  appraiser.  I  have  understood  that  Mr. 
Dale  loaned  money  to  an  employe.  Classification  can  not  be  posted  at  the  close  of  busi- 
ness each  day.  By  the  rule  of  the  appraiser,  invoices  can  not  remain  in  a  division  longer 
than  7  days,  except  by  returning  the  number  of  the  invoice  to  the  invoice  bureau.  Brok- 
ers desiring  to  hold  back  their  invoices  attach  thereto  written  request  for  re-test  or  re- 
sample.    This  detains  them. 

Geo.  M.  Andeeson. 

Sworn  to  and  subscribed  before  me  this  11  day  of  July,  A.  D.  1887. 

T.  Aubeey  Byene, 
Special  Treasury  Officer. 


Exhibit  127. 

Philo  Cole,  messenger  in  the  laboratory,  states  as  follows: 

I  was  appointed  as  a  damage  examiner  in  1877;  discontinued  about  1880;  in  1883  as 
messenger  in  the  5th  division.  I  was  removed  in  July,  1885,  and  re-appointed  as  mes- 
senger in  July,  1885. 

Since  my  last  appointment  I  have  been  employed  all  the  time  mixing  sugars  for  tests 
in  the  laboratory.  My  duty  consists  of  cleansing  the  tubes  containing  sugar  solutions 
for  tests,  as  also  mixing  the  sugars  for  the  weighers  as  they  come  in.  I  think  that  I 
have  heard  them  say  in  the  laboratory  that  that  man  (pointing  him  out)  was  Col. 
Burt.  I  have  very  seldom  seen  him  there.  I  have  been  told  that  he  represented  Have- 
myer  and  Elder.  When  the  sugar  samples  come  up  from  the  laboratory  they  come 
in  tin  sample  boxes,  the  serial  number  of  the  sample  is  pasted  on  the  side  of  the  can,  the 
contents  are  dumped  upon  the  table,  from  this  into  a  mortar  and  carefully  ground  up, 
reducing  the  lumps  to  grains.  Sometimes  we  find  particles  of  wood  and  gravel  and  coal 
and  pieces  of  ra veilings.  These  are  always  carefully  removed  so  that  the  sugar  is  in  a  clean 
state,  as  clean  as  eye  and  careful  manipulation  can  make  it. 

Sometimes  the  lumps  are  dry  and  hard,  and  sometimes  the  lumps  are  moist.  Some- 
times the  sugar  comes  very  wet;  it  sometimes  comes  very  soddy,  heavy,  and  particu- 
larly moist;  sometimes  it  has  the  appearance  of  being  very  footy.  I  will  not  say  that 
these  very  moist  sugar  samples  have  been  made  so,  but  still  they  would  have  the  ap- 
pearance. I  have  never  reported  the  fact  of  the  sugar  being  particularly  moist.  Dr. 
Sherer,  chief  of  the  laboratory,  superintends  my  work.  I  take  all  orders  from  him. 
When  Dr.  Sherer  is  not  in  the  laboratory  Examiner  Abbott  is  in  charge.  Dr.  Sherer 
is  occasionally  away  from  the  laboratory. 

This  particularly  moist  sugar  always  necessarily  entails  a  very  low  test. 

As  I  have  been  a  damage  examiner  these  sugars  that  are  brought  up  to  me  are  not 
damaged  sugars.  If  I  had  realized  that  they  were  damaged  sugars  I  would  have  im- 
mediately reported  that  fact. 


S.  Ex.  123- — 5 


66 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


I  have  frequently  seen  samples  returned  to  the  laboratory  for  re-tests,  the  identity  of 
•which  I  have  felt  perfectly  satisfied  of,  and  Mr.  Smiley  and  myself  would  often  remark 
that  "this  is  the  sugar  that  we  had  a  little  while  ago."    They  sent  them  back  twice. . 

I  may  have  heard  the  remark  made  that  when  sugars  have  been  sent  up  often  for  re- 
tests,  and  the  work  has  come  in  late  in  the  afternoon  when  we  were  about  to  close  our 
day's  work,  that  these  sugar  samples  are  some  of  "Burt's  sugars." 

Sampler  Ball  does  not  test  the  damaged  sugars,  and  prepares  the  same. 

Damaged  sugars  are  brought  into  the  laboratory  in  papers  by  John  Sherer,  damage 
examiner,  and  put  one  side;  then  Sampler  Ball  mixes  and  tests  them,  and  when  Ball  is 
away  I  think  same  have  been  tested  by  Mr.  Crumbie. 

I  have  have  heard  that  there  was  a  firm  called  Sherer  Brothers  in  this  city.  I  have 
heard  that  they  were  chemists.  I  never  visited  their  laboratory.  I  have  seen  foreigners 
visit  the  sugar  laboratory  and  call  upon  Dr.  Sherer. 

Sometimes  I  have  taken  invoices  from  the  laboratory  to  Mr.  Remsen.  I  know  the 
difference  between  a  certificate  of  polarization  and  an  invoice,  and  am  familiar  enough 
with  customs  business  to  know  an  invoice  when  I  see  it.  Sometimes,  six  times  a  month, 
I  have  carried  invoices  from  the  laboratory.  This  invoice  which  you  hand  me  is  similar 
to  those  that  are  carried  by  me  from  the  laboratory  to  the  sugar-room,  though  they  are 
always  folded  up  and  I  don't  see  the  inside;  still,  from  my  knowledge  of  customs  mat- 
ters, I  know  that  they  are  invoices.  I  can't  state  positively  whether  the  papers  that  I 
have  carried  to  the  sugar-room  were  invoices  or  certificates  of  polarization. 

I  know  Mr.  Dale,  of  the  8th  division.  I  have  heard  something  or  other  about  Mr. 
Dale  and  money  transactions. 

Philo.  Cole  was  born  1808  or  1816— "don't  know  which." 

Philo.  Cole. 

Sworn  and  subscribed  to  before  me  this  19th  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 

Special  Treasury  Officer. 


Exhibit  128. 

New  York,  July  11,  1887. 

Jas.  S.  Dale,  opener  and  packer  in  the  8th  division,  states  as  follows: 

I  have  been  employed  in  the  8th  division  in  one  capacity  and  another  for  the  past  13 
years,  the  principal  part  of  that  time  being  connected  with  sugar  work.  I  have  no 
knowledge  whatever  of  any  irregular  practices  in  the  importation  or  treatment  of  sugars 
for  duty.  I  sometimes  carry  the  samples  of  sugar  for  test  from  the  sugar-room  to  the 
laboratory,  but  I  have  never  carried  any  message  from  a  sugar  broker  to  the  chief  chemist 
in  the  laboratory.  I  know  of  no  employe  at  the  appraiser's  store  who  has  had  or  at  the 
present  time  has  any  interest  whatever  in  the  residue  of  sugar  from  the  sugar  samples,  and 
I  have  never  had  interest  in  the  same.  I  have  never  received  a  dollar  from  any  one  for 
any  sugar  that  may  have  left  the  appraiser's  store,  directly  or  indirectly.  It  is  my  gen- 
eral duty  to  take  charge  of  the  refuse  sugar  samples,  which  I  generally  do  before  9 
o'clock  in  the  morning  and  after  4  o'clock  in  the  afternoon,  as  I  have  not  time  to  attend 
to  them  between  office  hours,  my  duties  consisting  of  looking  after  the  store  goods, 
such  as  confectionery,  glucose,  etc.,  and  in  assisting  in  the  making  up  of  samples  for  the 
laboratory  with  the  other  employes  of  the  division  who  are  under  Examiner  Eemsen, 
as,  for  instance,  the  examiners  and  samplers  on  the  city  district  No.  1,  when  not  other- 
wise employed. 

Thos.  D.  Tate  and  Robt.  Cunningham  are  the  only  ones  who  are  steadily  engaged  in 
the  sugar-room  in  making  up  samples  for  the  laboratory.  Thos.  D.  Johnson  keeps  the 
test-book  and  performs  other  clerical  work  in  the  sugar-room.  I  generally  deliver  the 
samples  in  the  laboratory  to  Mr.  Philo  Cole  or  Jas.  Smiley,  employes  in  the  laboratory. 
I  have  never  informed  any  employe  of  the  laboratory  whose  samples  I  was  delivering 
and  never  was  asked.  Some  of  the  employes  connected  with  sugar  matters  asked  me  if 
I  refused  to  take  the  oath  of  secrecy.  I  informed  them  that  I  refused  to  take  the  oath. 
I  know  Barney  Philips,  but  I  have  not  seen  him  within  a  year.  I  have  had  no  conver- 
sation with  Sugar  Broker  Jas.  Burt  relative  to  this  investigation.  My  official  duties 
keep  me  always  actively  employed  during  office  hours.  When  I  desire  to  absent  myself 
from  the  division  I  invariably  ask  permission  of  the  appraiser,  and  get  it.  For  the  past 
two  years  I  have  been  absent  but  one  day.  I  don't  think  I  have  been  absent  any  por- 
tions of  a  day  for  the  past  18  months.  I  have  loaned  money  to  the  employes  of  the 
appraiser's  store.  I  charge  no  interest  or  bonus.  I  have  seldom  received  any  compen- 
sation for  making  loans.  In  some  cases  where  I  have  been  put  to  the  trouble  of  getting 
the  money  from  a  friend  who  had  money  in  bank  I  have  charged  equivalent  to  the  in- 
terest for  the  accommodation.   I  may  have  taken  some  interest  from  some  of  my  brother 


Deed,  September — ,  1886.  Anna 
T.  Dale,  wife  of  James  S.  Dale, 
to  Jaue  M.  Dncey;  con.,  $7,000. 
Recorded  September  1,  1880. 
Mortgage,  $4,000. 


S.  Ex.  123—50-2 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


67 


officers,  but  I  am  not  sure.  I  have  no  other  source  of  iucorae  outside  of  my  salary,  which 
is  $3.00  per  diem. 

I  have  lived  carefully  and  within  my  income,  and  whatever  my  accumulations  may  be 
they  have  been  derived  through  my  salary.  Appraiser  McMullen  has  signed  checks 
brought  to  him  by  me,  belonging  to  other  employes  of  the  appraiser's  store.  I  have  no 
connection  with  business  affairs  outside  of  my  duties  as  an  employe  of  the  Government. 
1  am  well  enough  acquainted  at  the  sub-treasury  to  get  employes'  checkscashed  for  them. 
I  own  no  real  estate.  I  have  bought  no  real  estate  since  I  have  been  in  the  service,  and 
have  bought  none  for  any  other  person.  I  have  sold  no  real  estate  to  any  officer  or  em- 
ploye of  the  Government.  I  reside  at  635  Walton  ave.,  N.  Y.  City.  I  never  sold  a  piece 
of  property  to  Mr.  .Tas.  Doucey,  superintendent  of  openers  and  packers.  My  wife  owns 
some  property  on  Walton  ave.  She  sold  a  piece  of  property  to  Mr.  Doucey,  and  also  a 
piece  to  Mr.  Peter  Twamley,  a  sampler,  also  another  to  Mr.  Geo.  K.  Gilbert,  a  sam- 
pler, i  do  not  know  that  she  has  sold  any  to  any  other  employes  of  the  Govern- 
ment. My  wife  has  acquired  during  the  last  two  years  seven  building  lots  on  Walton 
ave.,  New  York  City.  My  wife  built  four  houses  on  four  of  the  lots.  The  total  value 
of  the  property  might  be  considered  at  a  fair  estimate  to  be  valued  at  about  $25,000. 
My  wife  has  been  engaged  in  no  business  since  I  have  been  an  employe  of  the  Govern- 
ment. There  is  no  particular  difference  in  the  value  of  the  four  houses.  I  have  built 
houses  in  former  times,  but  failed  in  business  in  1873  or  1874. 

I  did  not  assume  any  active  direction  in  their  erection-  my  wife  and  a  friend,  who 
was  a  builder,  directed  their  construction.  I  never  visit  the  location  during  business 
hours.  In  regard  to  the  complaint  of  Verrinder  &  Callahan,  that  they  were  not  receiv- 
ing all  the  sugar  samples  that  they  were  entitled  to,  I  have  to  say  that  I  reported  to  the 
asst.  appraiser  that  they  had  received  all  they  were  entitled  to.  I  have  never  seen  Mr. 
Jas.  Burt,  sugar  broker,  in  the  sugar-room,  neither  do  I  recollect  of  seeing  Mr.  Dreyfoos 
there.  I  have  no  knowledge  of  any  changing  of  sample  packages  of  sugar  at  the  Mat- 
thersou  &  Wtigher  Sugar  Refinery  Works,  Jersey  City,  neither  do  1  recollect  of  making 
a  statement  to  any  one  that  I  had  such  knowledge. 

I  know  of  no  irregularites  whereby  tests  are  lowered,  but  I  am  of  the  opinion  that  the 
tests  can  be  lowered  by  sampling  in  wet  weather  or  moistdays,  or  by  the  use  of  water 
on  triers  or  the  taking  of  the  sample  from  low-grade  sugar,  and  other  causes.  And  I 
am  of  the  opinion,  from  nine  or  ten  years  experience  in  the  sugar-room,  that  the  inter- 
ests of  the  revenue  would  be  better  protected  by  washing  the  tin  cans  in  which 
samples  are  placed  for  transmittal  to  the  laboratory  in  an  entirely  separate  room  from 
the  sugar-room  in  which  the  samples  are  mixed  and  prepared  for  the  chemist,  and  lor 
the  following  reasons:  That  the  moisture  and  dampness  arising  from  the  hot  water  used 
in  washing  the  cans  influences  and  moistens  the  atmosphere  of  the  room,  Avhieh  moisture 
would  naturally  be  absorbed  by  the  sugars,  as  nothing  to  my  mind  takes  up  moisture  as 
quick  as  sugar,  which  is  awell-recognizadfact,  and  thus  lowering  the  test  for  classification. 
Another  advantage  would  be,  that  it  would  relieve  the  opportunity  of  any  dishonest 
person  to  manipulate  samples  with  water,  if  the  cans  were  washed  in  another  room. 

Either  Mr.  Trainer  or  Mr.  Johnson,  clerks  in  the  8th  division,  receive  applications 
from  sugar  importers  and  brokers  for  re-tests.  I  think  I  have  known  cases  where  two 
re-tests  have  been  made  of  sugar  samples. 

J.  S.  Dale. 

Sworn  and  subscribed  to  before  me  this  11th  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 
SjMcial  Treasury  Officer. 


Exhibit  129. 

New  York,  July  25,  1887. 
Robert  Cunningham,  opener  and  packer,  detailed  in  sugar-room  to  wash  cans: 
About  18  months  to  two  years  ago  Broker  Burt,  with  Asst.  Appr.  Hay,  Mr.  Dale,  and 

I  thmk  Dr.  Sherer,  were  in  the  sugar-room  examining  a  sugar-crushing  machiue.  This 

machine,  I  think,  was  approved  by  Special  Agent  Ayer.    Mr.  Hay  said  it  was  a  n'ue 

piece  of  machinery.    Broker  Burt  strongly  disapproved  of  it.    It  has  not  since  been 

used.    The  machine  is  now  in  the  sugar-room. 

Sometimes  I  carry  notes  to  Dr.  Sherer  from  the  sugar-room.    These  notes  ask  for  a 

re-test  of  a  certain  serial  number.    If  Dr.  Sherer  is  not  there  I  give  them  to  Mr.  Abbott. 

I  often  hear  a  remark  in  the  sugar-room  like  the  following:  "The  Colonel  (meaning 

Broker  Burt)  has  come.    Anything  for  the  Colonel?  " 

Robert  Cunningham. 
Sworn  and  subscribed  before  me  this  25th  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 

Special  Treasury  Offieer, 


68 


^FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


Exhibit  130. 

New  York,  July  25,  1887. 

Isaac  W.  Cole,  sampler,  8th  division,  states  as  follows: 

I  was  originally  appointed  opener  and  packer  in  1884;  dismissed  by  Appr.  McMullen 
without  charges  in  1885;  passed  civil-service  examination  and  on  eligible  list;  appointed 
sampler  in  June,  1885.  While  I  was  originally  opener  and  packer,  I  was  detailed  as 
clerk  in  invoice  bureau. 

I  know  of  no  irregularities  in  the  sampling,  testing,  or  appraisement  of  sugars  than  oc- 
casionally arises  from  the  fact  that  the  sample  packages  are  not  always  properly  laid  out 
mark  by  mark, and  thereby  endangering  the  collection  of  the  proper  duty.  I  heard  of 
one  case  where  the  examiner,  Mr.  Bowne,  called  our  attention  to  some  samples  that  he 
considered  too  wet.    I  have  been  warned  with  other  samplers  not  to  use  a  wet  sponge. 

Merchant  samplers  are  in  advance  of  us  in  drawing  their  samples.  When  sent  to  draw 
re-samples,  I  have  sometimes  found  the  packages  melted  up.  I  have  sometimes  found 
various  grades  of  sugars,  mixed  in  a  certain  mark,  and  if  we  were  not  alert,  the  Gov- 
ernment revenue  would  be  defrauded. 

The  outside  men,  meaning  the  examiners  and  samplers,  take  their  orders  from  Ex- 
aminer Bowne,  as  a  general  thing. 

We  are  sometimes  compelled  to  use  a  lantern  in  the  refineries  in  order  to  distinguish 
the  sample  packages,  their  marks,  and  to  ascertain  whether  they  have  been  stencilled, 
llsilo,  Cebu,  and  Manila  sugars  are  rarely  laid  out  mark  by  mark,  thus  imperilling  the 
interests  of  the  Government  as  far  as  revenue  is  concerned,  unless  we  are  careful  in  our 
sampling.  I  have  sometimes  drawn  No.  1  sugar  from  an  llsilo  cargo,  which  was  laid  out 
as  No.  3  sample;  this  I  have  often  seen.  We  samplers  are  compelled  to  carefully  watch 
the  quality  of  this  kind  of  sugar  when  we  draw  samples,  in  order  that  the  Government 
may  obtain  its  proper  revenue. 

1  have  heard  it  stated  that  llsilo  sugars  have  been  permitted  to  be  discharged,  no 
marks  indicated,  and  yet  the  weigher  enters  upon  his  return  weights  for  marks,  explana- 
tory information  being  probably  obtained  from  the  importer. 

Isaac  W.  Cole. 

Sworn  and  subscribed  to  before  me  this  25  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 
Special  Treasury  Officer. 


Exhibit  131. 


Patrick  H.  Doonan,  messenger  in  laboratory,  under  oath,  states: 
I  carry  the  sugar  reports  from  the  laboratory  to  the  sugar  room. 

I  have  sometimes  carried  messages  from  Captain  Flowers  to  Mr.  Remsen,  to  prepare 
ceitain  sugar  for  comparative  tests. 

I  have  sometimes  carried  up,  at  the  request  of  Clerk  Johnston,  who  keeps  the  test- 
book  in  the  sugar- room,  requests  for  re-test  like  this  sample  which  you  show  me,  but 
they  are  folded  up  in  note  fashion.  Mr.  Johnston  asks  me  to  hand  them  to  Dr.  Sherer; 
about  a  half  a  dozen  times  this  occurred.  Sometimes  I  carry  little  memorandum  notes 
from  the  laboratory  to  the  sugar- room. 

I  used  to  see  Broker  Burt  coming  up  and  down  stairs  in  the  building;  I  have  seen  him 
very  often;  so  often  that  it  was  an  occurrence  that  did  not  impress  itself  upon  me,  look- 
ing after  the  interests  of  the  firms  that  he  represents  and  getting  his  sugar  passed,  &c. 

I  have  met  Mr.  Remsen  going  up  into  the  laboratory  very  often. 

■*  *  *  *  #  ,•  *  * 

The  first  time  I  saw  Dr.  Sherer  in  his  office  after  making  the  above  statement  he 
asked  me  how  I  came  out  in  the  examination,  and  if  I  was  very  much  disfigured. 

Patrick  H.  Doonan. 

Sworn  to  and  subscribed  before  me  this  25th  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 

Special  Treasury  Officer. 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


69 


Exhibit  13?.- 

New  York,  July  26, 1887. 

Nercholas  I.  Flocken,  sampler,  8th  division,  states  as  follows: 

I  was  originally  appointed  opener  and  packer  in  1885,  and  made  sampler  in  May,  '86. 

I  use  a  damp  sponge  to  clean  my  trier,  although  I  am  furnished  with  crocus  cloth  to 
clean  the  same.  I  mean  by  a  damp  sponge  that  which  water  can  not  be  wrung  from  it. 
I  do  not  use  a  sopping  wet  sponge.  I  do  not  use  a  sponge  out  of  which  water  would  run 
upon  the  floor  if  squeezed  on  my  trier.  My  attention  was  called  by  Examiner  Bowne, 
when  I  was  first  made  sampler,  to  certain  sugar  samples  which  had  the  appearance  of 
too  much  water  being  used  in  drawing  them.  He  informed  us  that  it  was  irregular, 
and  that  the  men  were  liable  to  be  discharged  upon  the  district  upon  which  it  occurred. 

On  the  day  in  last  November  when  you  were  upon  the  dock  watching  the  sampling  of 
sugars  at  the  Havemeyer  &  Elder  refinery  I  do  not  remember  that  I  used  a  sopping  wet 
sponge.  I  remember  of  sampling  a  row  of  hogsheads  that  day  in  your  presence.  I  did 
not  know  on  that  day  that  you  were  a  Government  officer.  No  one  ever  positively  in- 
structed me  to  use  hot  water  in  the  sponge.  I  remember  being  accompanied  by  you  to 
the  Brooklyn  refinery.  Broker  Dreyfoos  may  have  also  been  present,  but  I  do  not  remem- 
ber it.  I  do  not  remember  of  any  conversation  with  him  that  day  while  sampling. 
Broker  Dreyfoos  or  his  sampler  are  sometimes  about  when  sugars  represented  by  them 
are  being  sampled. 

In  sampling  mat  packages  I  always  try  to  get  the  sample  from  the  centre.  I  never 
heard  of  the  finding  of  fraudulent  stencil-plates.  I  have  always  found  sugar  samples 
properly  laid  out  mark  by  mark;  I  have  always  found  Iloilo,  Cebu,  and  Manila  sugars 
mark  by  mark.  I  have  found  occasionally  in  mat  samples  one  or  two  samples  of  high 
or  low  grade  sugars  which  did  not  belong  in  the  file  where  they  were,  and  consequently 
were  not  taken  by  me  as  a  sample.  I  have  been  ordered  by  the  exaniiners  to  go  through 
the  cargo  and  see  whether  the  sugar  of  a  certain  mark  in  the  cargo  corresponded  with  the 
sugar  representing  that  mark  in  the  sample  pile.  I  have  neverfound  any  difference. 
Almost  daily  we  have  to  sample  in  the  dark  in  the  warehouses,  necessitating  the  use  of 
a  lantern.  I  have  been  on  the  refinery  district  but  once  or  twice  since  I  was  appointed 
in  May,  '86,  always  being  detailed  elsewhere.  I  have  known  occasions  where  the 
weigher  did  not  lay  out  the  full  complement  of  samples. 

I  have  never  in  my  experience  seen  the  merchant  samplers,  except  in  the  case  of  hogs- 
heads, draw  their  samples  before  we  do,  but  it  is  almost  invariably  that  they  draw  their 
samples  from  hogsheads' ahead  of  the  U.  S.  samplers.  I  do  not  remember  ever  seeing 
bag  samples  which  had  been  sampled  by  merchant  samplers  before  us,  and  mats  never. 
We  always  make  up  samples  in  tin  boxes,  and  do  not  remember  of  ever  putting  any  up  in 
paper.  I  know  Jno.  Hetherington,  the  sampler  for  Broker  Dreyfoos.  He  generally  informs 
us  when  his  cargoes  are  ready.  I  have  worked  on  other  cargoes  while  he  was  working 
on  the  dock  or  in  the  store.  I  have  talked  with  him  on  all  subjects  of  conversation 
other  than  sugar  matters.  I  should  judge  Mr.  Hetherington  to  be  a  communicative  sort 
of  person.  I  have  been  in  the  sampling  office  at  the  refinery,  when  permission  has  been 
received  by  telephone  from  the  8th  division  to  melt  up  certain  re-sample  sugars  asked 
for  by  the  refinery  people.  I  have  never  gone  to  draw  samples  from  re-sample  packages 
and  found  them  melted  up.  It  is  with  greater  difficulty  samples  are  drawn  from  hogs- 
heads tiered  two  high  than  if  only  placed  one  tier  high. 

N.  J.  Flocken. 

I  have  signed  each  page  of  my  evidence  simply  to  make  it  certain  that  it  is  what  I 
testify  to. 

N.  J.  Flocken. 

Sworn  to  and  subscribed  before  me  this  26  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 
Special  Treasury  Officer. 


Exhibit  133. 

New  York,  July  12,  1887. 

Archibald  B.  Freeborn,  sampler,  8th  division,  states  as  follows: 

I  entered  the  sugar  division  as  sampler  about  1877,  and  have  been  in  it  nearly  ever 
since. 


70 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


I  donotknow  of  any  irregularities  in  the  importations  of  sugar  relating  to  the  sampling, 
testing,  and  classification  of  the  same.  I  always  draw  my  samples  of  sugar  according 
to  the  regulations.  I  do  use  a  wet  sponge.  A  sampler  could  lower  the  test  of  a  sample 
by  using  too  much  water  on  his  trier.  Tests  of  samples  can  also  be  lowered  by  drawing 
the  sample  from  the  Iboty  portions  of  the  packages;  also  by  drawing  low  grade  or  moist, 
sweaty  portions  of  bags.  I  have  heard  it  spoken  of  once  or  twice  that  water  was  care- 
lessly used  in  drawing  samples.  I  do  not  know  of  any  sampler  that  has  been  repri- 
manded for  using  too  much  water. 

I  remember  an  instance  at  the  Havemeyer  &  Elder  refinery  where  I  called  the  atten- 
tion of  the  examiner  to  the  appearance  of  moisture  in  the  sample  hogsheads,  and  showed 
to  Asst.  Appraiser  Hay  samples  of  about  20  hogsheads  indicating  moisture. 

I  do  not  know  what  action  he  took.  A  similar  case  transpired  at  Robinson's  stores  a 
couple  of  years  ago,  when  I  called  the  attention  of  Examiner  W.  D.  Davis  to  the  mat- 
ter. What  action  he  took  in  the  matter  I  do  not  know.  Sample  bags  are  always  laid 
out  mark  by  mark,  except  where  marks  can  not  be  distinguished,  when  special  orders 
are  given.  Jn  the  case  of  hogsheads  no  attention,  is  paid  to  the  separation  of  hogsheads 
mark  by  mark.  I  have  heard  of  some  instances  where  sample  packages  were  not  sten- 
cilled up  by  the  weigher,  but  stencilled  in  the  warehouse  alter  the  sugar  was  stored  by 
some  parties  unknown.  All  samplers  carry  keys  to  the  wooden  chest  containing  sam- 
ples. 

As  a  rule  sample  cans  are  provided  for  the  samples;  when  not  available  paper  is  used. 
Merchants'  samples  have  been  taken  from  sample  packages  before  the  U.  S.  samplers 
had  taken  theirs.  Mr.  Dreyfous  is  generally  on  the  dock  when  his  sugar  samples  are 
being  taken  at  any  of  the  refineries.  Mr.  Dreyfous's  man,  John  Hetherington,  draws 
his  samples  immediately  after  us.  He  has  drawn  samples  before  theU.  S.  samplers  have 
drawn  theirs,  and  has  at  times  drawn  them  at  the  same  time.  Jim  Vale,  Burt's  sam- 
pler, draws  his  samples  before  we  get  there.  The  heavy  months  for  samplers'  work  are 
April,  May,  and  June,  when  more  than  one-half  of  the  yearly  importations  arrive.  Gen- 
eral samples  are  drawn  from  the  cargo  when  a  doubt  arises  as  to  the  accuracy  of  the  U. 
S.  sample  packages.  This  occurs  about  once  a  month.  I  have  refused  to  sample  pack- 
ages where  they  were  not  properly  laid  out  mark  by  mark.  It  is  impossible  on  district 
No.  2  for  one  examiner  to  personally  supervise  the  sampling  in  busy  seasons. 

We  do  not  use  the  red  plugs.  I  think  they  were  discontinued  under  orders  from  Spe- 
cial Agent  Ayer.  At  the  Havemeyer  &  Elder  refinery,  which  is  in  district  No.  2,  the 
sample  packages  are  at  times  trucked  way  into  the  refining  house  where  steam-pipes  are 
in  close  proximity,  and  where  the  U.  S.  sample  packages  should  not  be  placed,  and  some- 
times from  21  to  28  hours  elapse  before  the  samples  are  drawn,  thus  giving  opportunity 
lor  the  moisture  to  penetrate  the  sugars  and  lower  the  test.  When  the  U.  S.  samplers 
visit  this  refinery  to  take  their  samples  we  always  find  that  some  one  other  than  a  Gov- 
ernment sampler  has  preceded  us  and  taken  samples  from  the  packages,  which  is  clearly 
in  violation  of  the  regulations. 

It  is  a  recognized  fact  that  the  samplers  are  compelled  to  work  harder  and  longer  than 
on  any  other  district,  and  this  particularly  relates  to  the  Havemeyer  &  Elder  refinery,  of 
which  Mr.  Jas.  Burt  is  the  representative  at  the  appraiser's  store. 

We  would  not  be  called  upon  by  our  examiners  to  commence  sampling  a  cargo  on  any 
other  district  after  3.30  o'clock  p.  m.,  while  we  have  been  called  upon  as  late  as  4.30 
p.  m.  to  begin  sampling  a  new  cargo  for  Havemeyer  &  Elder. 

The  inspectors,  whose  duty  it  is  in  discharging  a  cargo  to  see  that  it  is  unloaded  prop- 
erly and  laid  out  mark  by  mark,  and  also  to  designate  the  place  where  the  sample  and 
re-sample  packages  shall  be  laid,  do  not  perform  this  duty,  thereby  causing  great  incon- 
venience and  delay  in  the  sampling  of  the  sugars. 

We  sometimes  find  amongst  the  sample  packages  damaged  sugars,  and  if  samples  are 
drawn  from  these  damaged  packages  the  tests  of  the  sample  would  be  lowered  for  duty. 

Generally  one  "trier"  full  of  sugar  drawn  from  a  sample  package  will  fill  a  sample 
can,  if  sugar  be  free  centrifugals,  but  invariably  we  have  to  draw  three  or  more,  and 
what  does  not  go  in  the  can  is  spilled  upon  the  ground. 

The  locks  on  the  sample  closets  on  the  docks  have  been  changed  several  times,  for  the 
reason,  as  I  understand,  that  irresponsible  and  improper  persons  had  keys  to  the  closets. 
The  present  sampling  regulations  are  good  enough  if  they  were  carried  out.  Our  tries 
have  very  little  chance  to  get  rusty,  from  the  fact  of  their  constant  use.  The  practice 
of  tiering  up  hogsheads  two  tiers  high  for  the  accommodation  of  the  refiners  should  be 
by  all  means  discontinued,  as  it  is  contrary  to  regulations  and  samples  can  not  be  fairly 
drawn. 

I  am  often  asked  by  the  refinery  employes  to  call  up  the  examiner  at  the  appraiser's 
store  and  ascertain  if  they  can  melt  up  sample  packages.  This  I  do  and  receive  favora- 
ble reply  direct  from  the  sugar-room  by  telephone.    Owing  to  this  practice  the  Govern- 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


71 


ment  is  unable  to  draw  a  re-sample  in  case  it  should  he  required,  and  is  contrary  to  reg- 
ulation. 

A.  B.  Freeborn. 
Sworn  to  and  subscribed  before  me  this  13  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 
Special  Treaty  Officer, 


Exhibit  134. 

New  York,  July  26,  1887. 

Geo.  K.  Gilbert,  sampler,  states  as  follows: 

I  was  originally  apptd  opener  and  packer  in  1881  or  1882,  aftd  made  sampler  in  Oc- 
tober, 1885.^ 

I  know  of  no  irregularities  in  connection  with  sugar  matters  at  this  port. 

I  use  a  damp  sponge.  In  one  or  two  instances  Examiner  Bowne  stated  that  somebody 
was  using  too  much  water  on  his  sponge  and  warned  us  against  the  practice,  and  showed 
us  one  lot  of  samples  affected  thereby. 

I  have  assisted  in  grading  cargoes  of  sugar  where  the  marks  were  so  indistinct  that 
the  sample  packages  could  not  be  laid  out  properly  by  the  marks.  Sometimes  we  have 
been  compelled  to  reject  certain  sample  packages  because  they  were  manifestly  of  a  dif- 
ferent grade  than  the  mark  should  contain.  I  have  sometimes  had  to  sample  packages 
in  refineries  and  warehouses  by  use  of  a  lantern. 

I  have  also  sometimes  found  that  when  I  had  gone  to  draw  my  samples  merchant 
samplers  had  been  there  before  me.  Sometimes  we  have  been  compelled  to  sample 
sugars  at  the  refineries  in  wet  weather,  but  under  shelter.  I  have  sometimes  been  or- 
dered to  draw  samples  from  re-sample  packages,  and  upon  inquiry  found  them  (the 
original  and  re-sample  packages)  melted  up.  I  knew  Broker  Dreyfoos,  and  met  Col.  Burt 
once  or  twice.  I  know  Jno.  Hetherington  and  Jas.  Vale,  their  samplers;  they  are 
sometimes  working  the  same  time  we  are.  Early  this  spring  I  bought  a  house  from 
Mrs.  Jas.  Dale,  value  $7,000,  well  mortgaged.  The  original  transaction  was  made  with 
Mr.  Dale  and  his  wife,  and  an  attorney  then  completed  it.  The  mortgages  referred  to 
above  are  held  by  other  parties  than  Mr.  Dale;  Mrs.  Dale  holding  a  second  mortgage  on 
the  property.  While  at  work  in  the  sugar-room  I  have  twice  carried  samples  to  the 
laboratory. 

The  last  time  I  was  at  work  on  Havemeyer  &  Elder's  refinery  district,  which  was  last 
month,  I  do  not  recall  making  but  very  few  re-samples;  I  should  think  not  more  than 
ene  or  two. 

Geo.  K.  Gilbert, 

Sampler, 

Sworn  to  and  subscribed  before  me  this  26th  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 

Spl.  Treasy.  Officer. 


I 


Exhibit  135. 

New  York,  July  11,  1887. 

Thos.  D.  Johnson,  clerk  and  verifer,  8th  division  sugar-room,  states  as  follows: 

My  particular  duties  are  to  keep  the  test-book.  When  the  certificates  of  tests  arrive 
in  the  sugar-room  from  the  laboratory  I  transcribe  the  chemist's  reports  to  the  test-book. 
I  enter  all  of  the  certificates  in  my  test- book;  the  only  other  person  entering  them  is  Mr. 
Remsen,  the  examiner.  I  see  ia  the  test-books  columns  ruled  under  the  heading  of  po- 
lariscopic  tests,  columns  ruled  and  numbered  1,  2,  3,  and  4,  whieh,  I  presume,  was 
intended  for  the  purpose  of  filling  in  with  the  different  tests  made  of  the  one  sample. 
Only  column  No.  4  is  used,  in  which  I  put  the  test  for  classification  as  indicated  on  the 
certificate  from  the  laboratory.  This  custom  I  found  in  vogue  when  I  entered  upon  my 
duties.  Examiner  Remsen  always  entered  under  the  head  of  column  1 '  Tests  taken  as 
basis  for  classification, "  the  classification  of  the  sugar,  which  are  identically  the  same 
figures  that  I  write  in. 

S.  Ex.  3  63 


72 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


The  laboratory  certificates  are  filed  away  ooce  a  month.  There  is  more  danger  in 
losing  a  laboratory  certificate  than  there  is  losing  the  test-book.  I  know  of  no  other 
record  of  tests  than  those  made  in  this  test-book.  I  have  seen  Examiner  Remsen  point- 
ing out  to  Dr.  Sherer  errors  in  the  laboratory  certificates  of  tests.  Dr.  Sherer  frequently 
visits  the  sugar-room  and  has  conferences  together.  I  have  seen  Mr.  Abbott,  of  the 
laboratory,  also  in  the  sugar-room.  I  have  seen  Damage  Examiner  Sherer  also  in  the 
sugar- room.  Capt.  Flowers,  the  clerk  in  the  laboratory,  makes  out  these  certificates 
and  brings  them  to  me  in  the  sugar-room.  P.  Doonan  also  does  messenger  work  be- 
tween the  laboratory  and  sugar-room,  as  does  also  Mr.  Morgan,  of  the  8th  division. 

I  was  messenger  in  the  second  (sugar)  division  when  Mr.  Jas.  Burt  was  assistant  ap- 
praiser of  that  division.  I  succeeded  Jacobs,  the  clerk  and  verifier,  in  his  duties  Nov. 
'85.  I  don't  think  I  have  been  in  the  laboratory  over  twice  since  my  appointment. 
Messengers  from  the  sugar  division  almost  daily  visit  the  sugar- room  with  requests  for 
re- tests  from  importers  or  their  brokers.  Brokers  Burt  and  Dreyfoos  make  the  most 
frequent  requests  for  se- tests,  as  they  represent  the  most  sugar  importers.  These  re- 
quests are  brought  to  me.  I  pin  the  request  to  the  invoice,  after  noting  the  request  for 
re- test  of  the  mark  on  the  test-book,  as  for  example:  under  date  of  Dec.  24,  '86,  Bay 
State  Sugar  Refining  Company,  represented  by  Broker  Dreyfoos,  Ex.  "California" 
from  Magdeburg,  entered  Dec  21.  Invoice  No.  12371;  there  were  the  following  pack- 
ages: 500  bags  beet  sugar,  marked  "  G  666;"  500  bags  "  B  406;"  500  bags  "  406  B;"  500 
bags  ' '  B  406  C ' ' — Examiner  Remsen.  No.  of  samples,  455,  456,  457, 458,  serial  numbers 
to  laboratory  Dec.  24.    Chemist  report  dated  Dec.  24;  tests  93.70,  94.0,  94.0,  94.30. 

Request  was  made  by  Broker  Dreyfoos  for  re-test  on  Dec.  28,  on  mark  "  B  406  C," 
500  bags,  which  was  granted,  the  original  test  being  94.30,  while  the  re-test  brought  the 
classification  to  94.0,  thus  losing  to  the  Government  one  lull  degree  for  duty  (Tf  ^  cent 
per  pound). 

Requests  are  usually  made  when  the  fractional  part  of  the  degree  is  small;  thus  91.1, 
91.2,  91.3,  and  91.4. 

I  never  saw  Mr.  Burt  in  the  sugar-room,  nor  Mr.  Dreyfoos,  or  any  other  broker,  al- 
though I  have  been  in  the  sugar-room  nearly  two  years  in  charge  of  the  test-book. 
I  have  heard  it  spoken  of  that  Mr.  Dale  loans  money. 

Thos.  D.  Johnston. 

Sworn  and  subecribed  to  before  me  this  11  day  of  July,  A.D.  1887. 

T.  Aubrey  Byrne, 

Special  Treasury  Officer. 


[N.  Y.  Cat.  No.  1118. — Certificate  of  polariscopic  test  of  sugar.] 
Sugar  return,  showing  polariscope  test,  under  Department  circular  No.  62,  May  22,  1883. 


TJ.  S.  Laboratoby,  Appraiser's  Office, 

New  York,  July  1,  1887. 


Labora- 
tory No. 


2630 
2631 
2632 
2633 
2634 
2635 
2636 
2637 
2638 
2639 


1st  test. 


90-R 

88.3 

87.5 

85 

53 

89.3 

93.9 

95.9 

88.7 

89 


2d  test. 


90-B 
88.5 
87.8 
85.31 


89-88.7 
94 
96 
88.7 
88.7 


3d  test. 


88.6 


Test  for 
classifi- 
cation. 


90 

88.3 

87.5 

85 

53 

88.6 

93.9 

95.9 

88.7 

88.7 


Labora- 
tory No. 


2640 
2641 
2642 
2643 
2644 
2645 
2646 
2647 
2648 
2649 


1st  test. 


94 

94.5 

95.4 

88.9 

87.9 

89 

88.3 

88.7 

88.8 

89.3 


2d  test. 


94 
94-94. 
95. 
89 
88 
89. 


89 

88.8 

89.3 


3d  test. 


94 


Test  for 
classifi- 
cation. 


94 

94 

95.4 

88.9 

87.9 

89 

88.3 

88.7 

88.8 

89.3 


Robert  Rigney,  T.  F.  B. 

Approved : 

Edward  Sherer, 
Chemist  in  Charge, 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


73 


[N.  Y.  Cat.  No.  1118. — Certificate  of  polariscopic  test  of  sugar.] 

Sugar  return,  showing  polariscope  test,  under  Department  circular  No.  62,  May  22,  1888. 

U.  S.  Laboratory,  Appraiser's  Office, 

New  York,  July  1, 1887. 


tory  No. 

1st  test. 

2d  test. 

2612 

79A 

79L 

2613 

83.8 

83.9 

2615 

83 

82.7 

2616 

85.3 

85 

2619 

81 

81 

2620 

83.6 

83.3 

2621 

83.8 

83.7 

2622 

83.3 

83 

2623 

76.7 

77 

3d  test. 


Test  for 
classifi- 
cation. 


79 

83.8 
82.70 
85 
81 

83.3 
83.7 
83 

76.7 


Labora- 
tory No. 


2624 
2590 
2614 
2018 
2625 
2626 
mil 
2628 
2029 


1st  test. 


88.5 

76 

81.7 

82.7 

88.3 

88.3 

88.4 

88.7 

88.7 


2d  test. 


88.8 

75 

81.4 

83 

88.6 

88.5 

88.7 

89 

89 


3d  test. 


75.7 


Test  for 
classifi- 
cation. 


88.5 

75.7 

81.40 

82.7 

88.5 

88.3 

88.4 

88.7 

88.7 


Approved : 

Edward  Sherer, 

Chemist  in  Charge. 


H.  J.  Abbott. 
G.  Land.smann. 


Exhibit  136. 

New  York,  July  25,  '87. 

Frederick  Leimbach,  sampler,  8th  division,  states  as  follows: 

It  is  a  rare  case  that  we  find  sugar  packages  not  properly  laid  out.  Sometimes  we  do 
find  them  not  properly  laid  out,  and  this  we  know  from  the  quality  of  the  sugar  as  we 
draw  our  samples,  and  if  we  are  not  careful  the  Government  will  not  receive  its  proper 
revenue. 

I  use  a  moist  sponge  with  only  a  very  little  water  in  it.  Examiner  Bowne  once  called 
attention  of  the  samplers  to  samples  of  sugar  which  he  showed  us  as  having  been  drawn 
on  another  district,  and  said  there  was  too  much  water  used  on  that  sugar  and  warned 
us  to  be  very  careful  about  wetting  our  sponges.  This  occurred  last  fall.  Sometimes  we 
are  compelled  to  sample  sugars  in  the  refineries  and  warehouses,  where  a  lantern  is  nec- 
essary to  distinguish  marks  and  stencilling  of  the  sample  packages.  I  always  deliver 
the  key  of  my  sample-boxes  to  the  examiner  every  night. 

I  sometimes  find  that  the  merchant  samplers  have  drawn  their  samples  from  the  sam- 
ple packages  before  we  draw  ours.  I  know  John  Hetherington  and  Jim  Vale  by  sight, 
samplers  for  broker  Burt  and  Dreyfoos.  I  have  been  sent  to  draw  re-samples  and  found 
the  packages  melted  up.  I  have  heard  permission  given  to  refiners,  over  the  telephone 
from  the  8th  division,  to  melt  up  certain  sugars.  It  has  happened  that  Iloila,  Cebu,  and 
Manila  sugars  have  not  been  laid  out,  mark  by  mark,  so  that  we  had  to  depend  upon 
the  look  of  the  sugar  to  tell  whether  it  was  a  high  grade  No.  1  or  a  low  grade  No.  3. 
The  weighing  of  these  sugars,  mark  by  mark,  has  often  been  done  when  no  marks  have 
been  indicated  on  the  permit.  Sometimes  when  I  am  on  duty  in  the  sugar- room  I  carry 
samples  to  the  laboratory.  I  do  not  know  of  any  of  the  sugar-sampling  regulations  that 
are  not  being  enforced. 

F.  Leimbacit,  U.  S.  Sampler. 
Sworn  and  subscribed  to  before  me  this  25th  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 
Special  Treasury  Officer. 


*  Exhibit  137. 

Adam  G.  Mundy,  sampler,  examined  under  oath,  states: 

I  was  appointed  Feb'y  17th,  1879.  I  have  been  a  sampler  ever  since.  Frank  May 
was  asst.  appr.  at  that  time. 

I  know  nothing  about  irregularities  in  the  sugar  division.  I  don't  know  of  any  sam- 
pler or  employe  of  the  Government  in  the  sugar  division  ever  being  paid,  directly  or  in- 
directly, for  manipulating  sugar;  nor  have  I  heard  of  samplers  receiving  gratuities. 

I  have  never  known  of  samplers  or  examiners  arranging  sample  packages  so  that  the 
low-grade  sample  packages  will  be  on  the  outside  of  the  sample  files. 


74 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


On  my  oath  I  know  of  nothing  which,  to  my  mind,  is  an  irregularity  relating  to  th« 
sampling  of  sugar. 

I  use  a  sponge,  one  very  slightly  damp.  I  have  never  used  a  wet  sponge.  The  only 
person  I  had  to  speak  to  about  it  was  the  late  Jno.  Farren  (sampler). 

I  have  a  key  to  the  sample-boxes,  but  not  one  to  the  sample  closets. 

I  found  a  fraudulent  stencil-plate  up  at  Harbeck'saud  gave  it  to  Examiner  McElwee 
last  month.  I  did  not  cut  any  of  the  bags  to  get  a  piece  of  the  bagging  which  showed 
the  stencil  mark  on  the  bag.  I  did  not  make  any  comparisons.  I  paid  no  attention  to 
the  matter  after  finding  it  and  giving  it  to  Mr.  McElwee. 

I  was  under  Mr.  Dreyfous  (who  is  now  a  sugar  broker)  when  he  was  an  examiner  for 
about  a  month. 

He  is  usually  present  on  the  wharves  when  his  sugar  is  being  treated. 
I  have  seen  his  sampler,  John  Hetherington,  on  the  docks. 

I  have  known  merchant  samplers  to  have  drawn  their  samples  from  sample  packages 
before  we  got  there. 

I  met  Mr.  McElwee  last  evening  and  he  told  me  all  about  this  investigation.  He  did 
not  suggest  or  advise  me  to  do  anything,  for  I  would  not  listen  to  him.  He  told  me  that 
if  I  had  any  knowledge  I  had  better  tell  it  to  you,  and  lor  that  reason  I  considered  him 
under  the  inliueuce  of  liquor;  I  got  disgusted  with  him. 

li  the  asst.  appr.,  Mr.  Tice,  should  ask  me  todoanything,  and  Examiner  Bowne  told  me 
not  to  do  it,  I  should  obey  my  superior  officer,  Mr.  Tice.  If  Examiner  Bowne  detailed 
me  to  a  certain  dist.  and  Asst.  Appr.  Tice  detailed  me  to  another.  I  should  obey  Mr.  Tice. 

I  am  always  provided  with  plenty  of  lanterns  and  would  not  sample'  in  the  dark.  I 
can  sample  hogsheads  that  are  tiered  two  high  as  well  as  on  the  ground. 

I  never  knew  of  the  report  that  was  made  by  Sampler  Gill,  and  which  was  investi- 
gated, as  regards  fraudulent  transactions  in  sugar  sampling. 

I  reside  at  374  10th  st. ,  So.  Brooklyn.  I  never  heard  of  certain  keys  of  the  sample 
boxes  being  lost,  nor  of  any  key  of  any  closet  that  was  found;  nor  did  I  find  any  closet 
that  had  been  broken  into. 

I  have  been  present  in  the  district  office  when  the  examiner  has  gone  to  the  telephone 
and  called  up  the  sugar-room  and  inquired  what  a  certain  sample  tested,  and  also  ask  if 
certain  sugars  could  be  melted  up,  and  the  answer  has  been  returned  that  they  could. 
I  have  heard  such  conversations. 

No  samples  were  ever  brought  round  and  shown  to  me  by  Examiner  Bowne. 

I  never  visited  the  office  of  sugar  brokers  on  Saturday  afternoons. 

There  is  an  order  in  the  office  prohibiting  samplers  from  visiting  the  offices  of  sugar 
brokers. 

I  don't  know  where  the  office  of  James  Burt,  sugar  broker,  is;  it  is  in  Pine  st.,  but 
its  whereabouts  I  don'tiknow. 

1  never  visited  the  office  of  Jos.  Dreyfous.  I  never  had  a  conversation  about  this  in- 
vestigation with  Messrs.  Freeborne  and  Twamley,  nor  did  I  ever  say  that  a  man  had 
everything  to  lose  and  nothing  to  gain  by  telling  the  truth  in  regard  to  frauds  in  sugar. 

I  do  not  know  how  low  classifications  in  sugar  are  effected. 

I  do  not  know  what  would  lower  the  classification  of  sugar. 

It  strikes  me  that  I  have  heard  of  samp1  ers  going  to  a  refinery  to  make  a  re-sample  and 
finding  that  the  re-sample  packages  had  been  melted  up. 

I  have  objected  to  sampling  because  the  samples  had  not  been  laid  out  properly;  that 
is  because  I  could  not  see  the  U.  S.  mark  on  them.  I  don't  know  whether  they  were 
stencilled  behind,  as  I  did  not  consider  it  part  of  my  duty  to  pull  them  down. 

1  do  not  understand  that  the  late  Sampler  Seymour  had  learned  of  irregularities  in 
sampling  sugar,  nor  do  I  know  why  he  was  asked  to  resign. 

I  can  not  say  that  the  wagons  conveying  the  samples  to  the  appraiser's  store  were  always 
accompanied  by  a  sworn  officer,  for  I  think  there  have  been  times  when  they  were  not. 
Jimmy  Maloney's  son,  who  is  not  a  sworn  officer,  has  sometimes  driven  a  sample  wagon. 

I  have  called  the  attention  of  my  examiner  to  packages  that  looked  like  damaged 
sugar,  but  have  refused  to  sample  them.  I  have  never  been  in  the  sugar-room  when  re- 
quests from  the  Havemyer  &  Elder  refinery  have  been  sent  up  or  by  telephone  inquir- 
i  ng  as  to  certain  tests  of  sugars.  4 

I  do  not  know  that  it  is  the  custom  for  brokers  to  ask  for  re-tests. 

It  is  supposed  that  Maloney  &  Kelly  own  their  wagons. 

I  never  heard  that  they  were  presents  to  them.  The  Government  furnishes  us  with 
crocus  and  oil  to  keep  our  triers  clean. 

Adam  G.  Munday, 

U.  S.  Sampler. 

Sworn  and  subscribed  to  before  me  this  25th  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byene, 
Special  Treasury  Officer, 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


75 


Exhibit  138. 

New  York,  July  25,  1887. 

Thomas  G.  MacQuaide,  sampler: 

I  was  originally  appointed  sampler  in  1875.  My  salary  was  $1,000  a  year,  and  in- 
creased to  $1,200,  1877.  I  was  once  called  before  Special  Agent  Chamberlin  to  state 
what  I  knew  relative  to  how  sugar  was  sampled,  and  as  to  what  I  knew  about  Samplers 
Knoblock,  Nugent,  and  Watson.  I  told  him  I  knew  nothing  of  these  men.  I  do  not 
know  of  any  irregularities  in  the  sampling  of  sugar  at  the  present  time.  Of  this  I  am 
positive.  1  do  use  a  moist  sponge.  If  it  was  too  wet  it  would  spoil  the  sugar  in  the 
box,  and  from  what  I  have  been  told,  I  think  it  would  lower  the  test.  I  have  been  re- 
peatedly warned  not  to  use  the  sponge  too  wet,  and  have  been  shown  sample  cans  of 
sugar  which  had  too  much  water  in  them.  I  have  found  sugars  of  another  mark  mixed 
with  the  mark  that  I  have  been  sampling.  I  have  found  sample  packages  of  low-grade 
sugars  in  the  piles  of  high-grade  sugars. 

We  oftentimes  find  low-grade  sugars  mixed  with  high-grade  sugars  and  vice  versa 
(evidently  by  mistake).  Sometimes  we  sample  in  dark  places,  which  necessitates  the 
use  of  a  lantern  to  see  the  marks,  and  to  see  also  whether  "U.  S.  sample"  is  stencilled 
on  the  bags  or  mats.  About  a  year  ago,  or  a  little  over,  I  discovored  irregularities  in 
the  laying  out  of  packages  for  sampling  at  Congress  st.  stores,  and  called  the  attention 
of  Mr.  McElwee,  who  was  then  a  sampler,  to  it,  and  he  called  Examiner  Davis'  atten- 
tion to  it.  If  it  had  not  been  discovered  the  Government  might  have  lost  some  duty  on 
the  cargo.  I  found  that  the  sample  packages  did  not  run  as  good  as  the  main  part  of 
the  cargo.  I  have  had  a  key  of  the  sample  closets,  under  Mr.  Bowne's  orders,  and  was 
directed  to  go  around  and  examine  the  closets  and  see  if  they  were  all  in  good  order.  I 
found  them  in  good  order.  A  long  time  ago,  some  years  back,  locks  had  been  changed 
by  the  Government  on  the  sample -closets.    I  do  not  know  the  reason  why. 

Sometimes  the  merchant  samplers  draw  their  samples  from  sample  packages  before 
the  U.  S.  samplers  draw  theirs.  I  often  see  Jim  Vale,  Broker  Burt's  sampler,  and  John 
Hetherington,  Broker  Dreyfoos'  sampler,  sampling  on  the  sugar  districts.  We  often 
work  alongside  of  each  other.  I  have  never  received  any  inducement  to  draw  samples 
favorable  to  an  importer  from  any  person. 

Examiner  McElwee  has  told  me  frequently  that  he  believed  that  money  was  being  paid 
by  importers  to  influence  sampling.  I  believe  that  ex-Sampler  and  Examiner  Gill  was 
an  honest  and  faithful  official,  and  any  statement  that  he  would  make  I  would  believe 
to  be  true.  I  never  knew  of  any  investigations  being  made  by  any  special  agents  rela- 
tive to  inequalities  in  sugars. 

I  am  of  the  opinion  that  Havemyer  &  Elder  and  the  Brooklyn  Refining  Company 
also  import  the  highest  grades  of  sugars  at  this  port. 

Thos.  G.  MacQuaide. 

Common  sense  teaches  me  to  sign  each  sheet  of  this  affidavit. 

Thos.  G.  MacQuaide. 

Sworn  and  subscribed  to  before  me  this  25th  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 
Special  Treasury  Officer. 


Exhibit  139. 

N.  Y.,  July  28,  1887. 

Luke  F.  McDermott,  sampler,  states  as  follows: 

I  was  appointed  sampler  about  April,  1886.  My  attention  has  been  called  to  certain 
samples  which  Examiner  Bowne  said  water  had  been  used  in  the  sampling,  and  remarked 
that  if  it  occurred  again  he  would  call  the  attention  of  the  appraiser  to  it.  I  do  not 
know  on  what  district  the  water  was  used  in  the  samples  referred  to  by  Mr.  Bowne. 

I  have  been  sent  lots  and  lots  of  times  to  draw  samples,  when  I  have  found  the  origi- 
nal samples  melted  up. 

I  consider  Examiner  McElwee  one  of  the  ablest,  if  not  the  ablest,  examiner  of  sugars 
in  the  8th  division — a  man  of  excellent  character  and  general  integrity.  Every  sugges- 
tion that  he  has  made  looking  to  reform  in  the  methods  of  sampling  and  examining 
sugars  has  been  frowned  down  by  the  majority  of  his  associate  officers.  I  think  if  the 
Secretary  desired  an  honest  opinion  as  to  matters  connected  with  the  8th  division,  that 
Examiner  McElwee  would  give  it  if  called  upon. 

When  I  was  a  messenger  and  acting  clerk  in  the  8th  division  Sugar  Broker  Burt  used 
to  come  in,  practically,  every  day.    A  soon  as  he  came  he  would  always  send  one  of  the 


76 


FRAUDS  IN  NEW  YORK  CUSTOM  HOUSE. 


officials  in  the  office  into  the  sugar-room  for  Examiner  Remsen;  the  clerks  hardly  ever 
waited  to  be  sent,  but  would  go  right  inside  and  say,  *!  The  colonel  is  here." 

It  was  Broker  Burt's  invariable  custom  to  look  over  the  invoice  blotter  and  select  out 
such  invoices  as  he  wished  sent  down  to  the  invoice  bureau,  and  those  that  he  did  not 
wish  sent  down,  although  the  sugar  noted  in  the  invoice  had  been  tested,  he  would  put 
back  in  the  blotter,  and  would  tell  Mr.  Remsen  "to  hold  them." 

Upon  nearly  every  occasion  that  Broker  Burt  visited  the  sugar-room  while  Mr.  Hay 
was  asst.  appraiser,  and  while  I  was  employed  there  as  clerk,  Mr.  Hay  would  go  out 
into  the  main  hallway  with  Broker  Burt  and  hold  private  conversations  with  him  of  ten 
or  fitteen  minutes'  duration. 

Luke  P.  McDermott. 

Sworn  to  and  subscribed  before  me  this  28  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 
Special  Treaty  Officer. 


Exhibit  CO. 

« 

Office  of  Special  Agent  Treasury  Department, 

402  Washington  street,  New  York,  June  28,  1887. 

Henry  William  Kerr,  a  stenographer,  residing  at  226  Atlantic  avenue,  Brooklyn, 
and  employed  by  Mr.  T.  Aubrey  Byrne  to  take  notes  pending  an  investigation  of  sugar 
matters  at  the  port  of  New  York,  upon  oath,  solemnly  swears  that  he  will  in  no  manner 
and  to  no  person  divulge  or  speak  of  anything  that  transpires  during  any  of  the  confer- 
ences at  which  he  may  be  present  or  a  part,  other  than  to  Special  Agent  H.  A.  Moore  or 
T.  Aubrey  Byrne,  under  any  circumstances  whatsoever;  and  also  swears  that  if  he  is  ap- 
proached in  any  manner  by  any  person  on  the  subject  he  will  immediately  make  known 
such  fact  to  T.  Aubrey  Byrne  or  Special  Agent  Moore. 

Henry  Wm.  Kerr. 

Sworn  and  subscribed  to  before  me,  this  28th  day  of  June,  A.  D.  1887. 

H.  A.  Moore, 

Special  Agent. 


Asst.  Appr.  Moore,  first  div.  (damage),  states  as  follows: 

That  the  statements  of  damage  allowances,  when  made,  are  posted  at  the  custom- 
house. The  damage  warrant  is  approved  by  me  after  the  damage  examiner  has  ascer- 
tained the  per  cent,  of  damage  which  is  to  be  allowed  upon  certain  marks  of  sugar. 

The  samplers  of  the  8th  div.  draw  the  damaged  sugar  samples  for  the  damage  exam- 
iner. The  sugar  is  then  brought  to  the  U.  S.  laboratory,  at  the  appraiser's  store,  there 
submitted  to  polariscope  tests,  and  the  per  cent,  of  damage  is  ascertained.  I  will  sub- 
mit to  you,  if  I  can  find  one,  a  printed  statement  which  covers  the  notation  of  the  polari- 
scope tests  of  the  damage  samples  with  the  damage  examiner's  certificate.  If  there  be 
such  printed  slip  on  which  the  per  cent,  of  damage  allowances  is  noted,  I  suppose  it  is 
attached  to  the  damage  warrants.    I  have  never  seen  one,  but  probably  it  is  done. 

The  ascertainment  of  the  per  cent,  of  damage  by  polariscope  is,  according  to  regula- 
tion, done  at  the  laboratory,  at  the  appraiser's' store.  I  never  heard  of  its  being  done 
elsewhere,  not  being  in  accordance  with  regulations,  of  course.  Sometimes  two  ex- 
aminers sign  the  damage  warrant.  If  the  examiner  is  a  man  ot  experience  he  alone 
signs  the  certificate,  but  it  is  always  approved  by  me. 

It  has  never  been  brought  to  my  attention  that  excessive  damage  has  been  allowed 
on  sugar. 

I  have  heard  of  no  claims  being  made  for  "commercial  damage"  other  than  to  the 
goods,  viz,  to  the  coverings,  not  to  the  contents. 

I  know  Mr.  Kippen,  damage  broker.  I  think  that  he  makes  a  specialty  of  damage 
broking. 

I  know  Wm.  Jones;  he  likewise  makes  a  specialty  of  damage  broking. 

I  think  both  of  those  men  attend  exclusively  to  damage  goods  of  any  kind. 

This  is  a  true  transcription  of  my  stenographic  notes. 

H.  W.  Kerr, 

Stenographer. 

A  true  statement  as  made  in  my  presence. 

H.  A.  Moore, 

Special  Agent. 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


77 


Assistant  Appraiser  Moore,  of  the  damage  division,  declines  to  sign  this  statement,  as 
the  questions  are  not  incorporated  and  that  this  is  a  garbled  and  unintelligible  statement. 

The  above  is  a  true  and  stenographic  transcript  of  the  statement  made  by  Assistant 
Appraiser  Moore. 

T.  Aubrey  Byene. 

Assistant  Appraiser  Moore  entered  the  examination  room,  interrupting  the  proceedings, 
when  Examiner  W.  D.  Davis  was  under  examination,  and  stated  that  he  would  not  sign 
the  statement,  as  it  was  in  a  garbled  and  unintelligible  condition;  that  the  questions 
were  not  incorporated,  and  although  informed  that  it  was  at  the  special  request  of  the 
Secretary  that  the  questions  should  not  be  incorporated  in  the  statements  of  the  gentle- 
men called,  he  still  refused  to  sign  and  laid  the  statement  down  upon  the  desk. 

His  manner  was  discourteous,  and  evidenced  to  me  a  very  disturbed  condition  of  mind. 

T.  Aubrey  Byrne, 
Spegial  Treasury  Officer. 


Exhibit  140. 

Office  of  Special  Agent  Treasury  Department, 

402  Washington  .$/.,  July  15,  1887. 

Mr.  T.  A.  Byrne: 

Sir:  In  reply  to  an  inquiry  made  to  Mr.  Johnson  this  morning  regarding  a  certain 
sample  of  sugar,  mark  not  verbally  specified,  he  said  in  substance  that  it  had  gone  to 
the  laboratory  yesterday  afternoon  and  had  not  yet  returned.  An  examination  of  his 
test-book,  made  directly  after  above  statement  (11. 3C),  showed  that  every  sample  sent 
to  the  laboratory  on  the  14th  of  July  was  reported  on  by  the  chemist  on  the  same  day. 
An  examination  of  same  book  and  at  same  time  showed  that  many  samples  had  been 
sent  to  the  laboratory  and  reported  on  already  (11.30  a.  m.). 

One  cargo,  as  imported  by  Skeddy,  Minford&  Co.,  on  the  Thaclara,  had  eight  different 
marks,  all  tested  and  reported,  yet  there  was  one  mark  K,  the  sample  of  which  had  not 
been  received  (mark  K  not  included  among  the  eight).  Inquiry  being  made  for  said 
mark  to  Mr.  Bowne  through  telephone.  Havemeyer  &  Elder  had  a  cargo  of  sugar  taken 
from  the  Santiago,  sent  to  the  laboratory  on  July  11th,  '85,  samples  3236,  3237,  3238, 
3239,  day  of  month  not  given  as  to  report  being  made.  A  re- test  of  the  same  sugar  was 
made  on  the  13th  of  July,  which  lowered  the  classification  of  two  of  the  marks,  at  least 
four  cents  per  cwt. 
Respectfully, 

Robert  Macgregor  Ormiston, 

Statistician  on  Sugar. 

Sworn  and  subscribed  before  me  this  15th  day  July,  1887. 

T.  Aubrey  Byrne, 

Spl.  Treasury  Officer. 


R.  M.  Ormiston  states  as  follows: 

I  have  just  returned  from  the  sugar-room  and  Examiner  Remsen  informs  me  that  when 
brokers  ask  for  re-tests  of  certain  sugars,  and  when  the  re-test  is  not  lower  than  the 
original  test  for  classification,  the  original  test  for  classification  is  taken  as  the  test  for 
duty. 

Robert  Macgregor  Ormiston. 
Sworn  and  subscribed  to  before  me  this  27  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 
Special  Treaty  Officer. 


Exhibit  141. 

James  O'Donnell,  sampler  8th  division,  examined  on  oath,  says: 
I  was  originally  appointed  a  sampler  in  Aug.,  1885. 

I  have  no  knowledge,  direct  or  indirect,  of  any  fraudulent  or  irregular  practices  in 
the  method  of  sampling,  testing,  or  appraising  sugars  at  this  port. 

I  have  never  heard,  nor  do  1  know,  of  any  person  who  received  a  present  or  compen- 
sation from  any  sugar  importer,  or  the  representative  of  any  sugar  importer  or  broker, 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


or  an  employe  of  any  sugar  importer  or  broker,  of  compensation  in  money,  or  a  promise 
of  money,  for  drawing  samples  so  as  to  secure  low  classification. 

John  Hethington  is  Broker  Dreyfoos'  sampler,  and  I  believe  they  call  Mr.  Burt's  man 
Jimmy  Vail. 

John  Hetherington  never  offered  me  money,  nor  have  I  received  money  from  any  per- 
son for  drawing  samples  in  any  shape  or  form  or  promise.  No  person  has  ever  tried  to 
influence  nie  in  my  work. 

I  use  a  moist  sponge;  it  is  necessary  that  thereshould  be  a  certain  amount  of  moisture. 
I  have  sometimes  found  pretty  low  grade  sugars  mixed  with  high  grade.  There  is  a  dif- 
ference in  sugar  that  may  belong  to  the  same  mark,  and  yet  vary  in  grades. 

I  carry  a  key  of  the  sample  boxes,  but  not  of  the  sample  closets. 

It  strikes  me  that  I  heard  Mr.  McElwee  say  something  of  a  sample-closet  key  that 
was  found. 

I  have  occasionally  heard  requests  made  by  telephone  from  the  sugar  districts  to  the 
sugar-room,  but  we  do  not  pay  much  attention  to  the  telephone. 

I  state  positively  that  1  have  no  knowledge,  direct  or  indirect,  of  any  fraudulent  or 
irregular  methods  in  the  manner  of  sampling  sugars. 

James  O'Donnell, 

U.  S.  Sampler. 

Sworn  to  and  subscribed  before  me  this  26th  day  of  July,  1887. 

T.  Aubrey  Byrne, 
Special  Treasury  Officer. 


Exhibit  142. 

N 

New  York,  July  25, 1887. 

Patrick  T.  Rahl,  messenger  and  acting  sampler: 

I  was  appointed  in  1 885.  I  know  of  no  irregularities  in  the  sampling  of  sugars.  I 
use  a  moist  sponge.  Merchant  samplers  do  not  draw  their  samples  from  sample  pack- 
ages before  the  TJ.  S.  sampler  draws  his.  I  sometimes,  in  refineries  and  warehouses, 
have  to  use  lanterns  to  distinguish  marks  and  see  whether  the  packages  have  been  sten- 
ciled. I  have  somtinies  found  in  piles  of  samples,  representing  a  certain  mark,  low 
grade  and  high  grade  sugars,  mixed,  but  we  draw  the  attention  of  the  examiner  to  the 
fact. 

1  know  John  Hetherington,  merchant  sampler,  and  Jim  Vale,  a  merchant  sampler. 
These  men  always  wait  until  we  are  through  before  they  draw  their  samples;  that  is, 
when  they  are  there.  I  know  Broker  Dreyfoos  by  sight.  I  have  heard  him  ask  an  ex- 
aminer to  telephone  Mr.  Remsen  and  inquire  whether  a  test  of  certain  sugars  had  been 
made,  and  permission  has  been  granted  to  melt  up  certain  sugars. 

I  have  been  sent  to  draw  samples  from  re-sample  packages  at  the  refineries  and  found 
that  they  had  been  melted  up.  I  always  find  Iloilo,  Cebu,  and  Manila  sugars  laid  out 
mark  by  mark. 

The  regulation  requiring  the  use  of  red  plugs  is  not  enforced. 
Havemeyer  &  Elder  receive  the  highest  grade  sugars  coming  to  this  port. 

Patrick  T.  Rahl. 

Sworn  to  and  subscribed  before  me  this  25  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 
Special  Treasury  Officer. 


Exhibit  143. 

New  York,  July  19,  1887. 
James  Smiley,  messenger,  laboratory,  states  as  follows: 

I  was  first  appointed  in  January,  1885.  My  duties  have  been  those  of  mixing  the 
sugar  samples  sent  from  the  sugar-room  to  the  sugar  laboratory.  I  break  the  lumps 
with  a  mortar  and  pestle,  and  pulverize  the  sugar,  then  return  it  to  the  cans  for  the 
weighers.  The  serial  number  of  the  sample  is  pasted  on  the  side  of  the  can,  I  never 
disturb  the  number,  and  never  act  upon  but  one  can  ata  time.  Oftentimes  I  find  large 
lumps  in  the  sample  cans.  These  may  be  as  a  general  thing  hard  and  dry,  still  some 
may  be  moist.  I  often  find  particles  of  impurities  in  the  samples,  like  bits  of  coal, 
wood,  gravel,  gunnycloth,  and  ravellings.  These  I  eliminate  from  the  sample  with 
great  care,  so  that  when  I  have  finished  preparing  the  sample  for  the  weigher  the  sugar 


FKAUDS  IN  NEW  YORK  CUSTOM-HOUSE.  79 

is  in  as  perfect  condition  as  I  can  make  it;  and  my  eyesight  is  good,  so  that  I  feel  free 
to  state  that  the  sample  is  properly  prepared  for  the  weigher. 

From  my  experience*.  I  can  tell  from  a  glance  centrifugal,  Pernambuco,  and  other 
grades  of  sugars.  Sometimes  I  receive  from  the  sugar-room  sugar  samples  that  some- 
times are  pretty  moist.  I  have  never  called  the  attention  of  Dr.  Sherer  to  this  fact,  but 
I  think  I  have  mentioned  it  to  other  polariscopists  in  the  laboratory.  1  have  mentioned 
it  to  Messenger  Cole,  my  associate  sugar-mixer,  "that  this  sugar  is  moist,"  and  he  has 
mentioned  the  same  tact  to  me  on  certain  samples.  These  sugars  were  not  damaged 
sugars.  While  I  had  no  knowledge  that  these  samples  had  been  tampered  with,  yet  I 
know  from  my  experience  in  the  sugar-mixing  that  these  samples  would  test  very  low 
on  account  of  this  moisture. 

I  have  known  a  certain  sample  to  be  sent  back  from  the  sugar- room  of  the  8th  divis- 
ion four  times  for  re-test,  and  1  know  that  it  was  the  same  sample  each  time,  and  I  have 
heard  the  remark  made  at  these  times,  when  re-tests  and  late  work  was  asked  lor,  that 
"  these  samples  must  be  some  of  so-and-so's  sugars;"  Burt's  and  other  importers'  sug- 
ars. Dr.  Sherer  has  general  supervision  of  my  work  of  mixing  sugars  and  gives  me 
general  directions  as  how  to  mix  the  sugar.  1  have  heard  it  stated  that  Mr.  Dale  loaned 
money  to  employes.  Mr.  Dale  sometimes  visits  the  laboratory  several  times  a  day.  I 
have  heard  of  the  firm  of  Sherer  Bros.,  sugar-testers,  down-town,  but  I  never  visited 
their  place.  Occasionally  I  am  sent  to  the  sugar-room  of  the  8th  division  by  Dr.  Sherer, 
or  Mr.  Flowers,  his  clerk.  Mr.  Philo  Cole,  messenger,  is  my  only  assistant  in  mixing 
sugars. 

James  Smiley. 

Sworn  and  subscribed  before  me  this  19th  July,  1887. 

T.  Aubrey  Byrne, 

Spl.  Treasury  Officer. 


Exhibit  144. 

N.  Y.,  July  25,  1887. 

Peter  Twamley,  sampler,  8th  division,  states  as  follows: 

In  1887  I  was  appointed  opener  and  packer,  and  assigned  to  the  damage  division.  In 
April,  1879,  I  went  into  the  sugar  division  as  sampler. 

The  only  irregularity  I  know  of  at  this  port  in  the  importation  of  sugar  is  that  some- 
times sample  packages  are  not  properly  laid  out  mark  by  mark  as  required  by  the  reg- 
ulations. I  have  frequently  called  the  attention  of  the  examiner  to  this  fact.  I  have 
iound  very  often  bags  not  stencilled  "U.  S.  sample  "  laid  out  for  us  by  the  store- keeper 
after  the  weighers  are  through.    I  have  refused  to  sample  these  packages. 

I  have  often  seen  samples  laid  out  which  did  not  represent  the  proper  proportion  of 
the  mark  of  the  cargo.  Then  when  we  would  make  complaint  the  storehousemen  would 
quickly  produce  bags  which  they  claimed  were  the  sample  packages. 

We  oftentimes  find  packages  of  sugar  in  the  sample  piles  which  are  not  stencilled 
*'  U.  S.  sample."  I  have  several  times  before  sampling,  upon  my  suspicions  being 
aroused,  looked  for  fraudulent  stencil  plates.  I  have  found  low-grade  sugars  mixed 
with  high-grade  sugars  of  the  same  mark;  I  mean  by  this,  they  are  laid  out  to  represent 
this  mark.  When  I  see  an  unusual  number  of  them  I  call  the  examiners'  attention  to 
it.  This  I  have  done  several  times.  Sometimes  I  find  that  merchant  samplers  have 
drawn  their  samples  from  the  U.  S.  sample  packages  before  we  reach  them.  I  use  a 
moist  sponge.  I  have  repeatedly  been  warned  not  to  use  my  sponge  too  wet.  I  do  not 
know  what  effect  water  would  have  on  testing  the  sugar. 

I  never  was  found  in  a  storehouse  sampling  sugar  with  a  sopping-wet  sponge. 

Mr.  Examiner  Bowne,  one  day,  showed  me  two  or  three  samples  in  which  water  had 
been  immoderately  used,  and  remarked  that  they  might  have  been  damaged  bags.  I 
have  keys  to  the  sample  boxes.  Sometimes  the  examiner  gives  me  the  key  to  the  sam- 
ple closets,  but  not  outside  of  business  hours.  I  did  lose  a  key  of  a  sample  closet, 
as  I  threw  it  to  an  examiner  at  his  request.  It  fell  overboard.  I  knew  at  one  time  that 
all  the  sample  closets  were  examined  and  made  more  secure.  I  have  often  been  ordered 
to  accompany  the  wagon  containing  the  samples  from  the  dock  to  the  appraiser's  store, 
when  the  owner  of  the  wagon,  who  is  a  sworn  officer,  is  not  there  to  accompany  it. 

I  signed  for  my  wife  an  agreement  for  the  purchase  of  a  house  from  Jas.  Dale,  price 
$7,000,  situated  on  Walton  ave.,  $3,000  cash  paid,  balance  on  mortgage.  I  have  heard 
of  Jas.  Dale  loaning  money  to  employes. 

According  to  my  judgment  Havemeyer  &  Elder  import  and  buy  the  largest  quantities 
of  the  highest  grade  sugars  that  come  to  this  port.  I  make  this  statement  from  my 
knowledge  as  a  sampler  of  the  different  grades  of  sugars.  I  have  sometimes  been  sent  to 
make  re-sample  of  the  sample  bags,  and  found  them  melted  up.    This  always  occurs  on 


80  FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 

the  refinery  districts.  Sometimes  in  the  refineries,  I  have  been  called  upon  to  sample 
packages  in  the  dark,  necessitating  the  use  of  a  lantern  to  find  the  sample  packages  and 
marks. 

I  only  know  two  sugar  brokers  at  this  port.  They  are  Burt  and  Dreyfoos.  Also  know 
their  samplers,  Jas.  Vail  and  John  Hetherington.  Broker  Dreyfoos  or  his  man  Hether- 
iugton  is  generally  present  when  sugars  represented  by  them  are  being  examined. 

Sometimes  1  am  ordered  by  Examiner  Remsen  to  visit  an  importer's  office  to  find  out 
the  marks  or  location  of  a  cargo. 

I  have  been  told  that  years  ago  there  was  a  sugar  ring,  and  that  samplers  made  money 
out  of  it,  but  to  the  best  of  my  knowledge  the  ring  does  not  existat  this  time. 

Peter  Twamley. 

Sworn  to  and  subscribed  before  me  this  25  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 
Special  Treats' y  Officer. 


Exhibit  145. 

Objecting  to  take  oath  to  secrecy. 

R.  E.  Bowne. — Examiner  R.  E.  Bowne  said:  "  I  object.  I  do  not  refuse  to  be  sworn 
as  far  as  anything  connected  with  the  sampling,  testing,  or  appraising  of  imported  sugars; 
but  so  far  as  muzzling  myself,  I  do  most  emphatically.  I  am  prepared  to  go  on  with 
anything  connected  with  the  business  of  the  Department,  but  I  refuse  to  preserve  se- 
crecy.   I  don't  think  anybody  but  a  grand  jury  can  " 

Jas.  S.  Dale. — Messenger  Jas.  Dale  said:  "No,  sir;  I  shall  not  take  any  such  oath." 

Edw.  Sherer. — Chief  Chemist  Edward  Sherer  said:  "  I  draw  the  line  there  "  (as  to 
secrecy).  I  am  ready  to  testify;  but  as  to  secrecy,  I  must  decline.  I  refuse  to  be  sworn 
to  secrecy. ' ' 

W.  D.  Crttmbie. — Examiner  W.  D.  Crumbie  said:  "If  you  are  not  a  notary  I  refuse 
to  be  sworn;  I  object  also  unless  questions  and  answers  are  to  be  included.  I  want  to 
see  your  authority." 

A.  G.  RE3ISEN. — Examiner  A.  G.  Remsen  said:  "  It  is  tacitly  understood  and  arranged 
that  objections  were  to  be  made  to  the  manner  of  procedure  in  this  investigation." 

The  above  are  statements  made,  to  me,  by  the  above  witnesses,  when  they  appeared 
before  me  to  be  examined. 

T.  Aubrey  Byrne, 

SpL  Treas'y  Officer. 

N.  Y.,  June  28,  1887. 


Exhibit  146. 

June  10th,  1887. 

Edward  S.  Fowler,  late  ass't  appr.  damage  division,  at  present  attorney  at  law, 

No.  55  Liberty  St.,  New  York,  states: 

I  was  ass't  appr.  in  charge  of  the  damage  div.  for  some  years,  and  was  suspended 
April  31st,  1885,  on  the  recommendation  of  Appr.  McMullen. 

The  *' sugar  ring"  is  a  most  powerful  organization,  and  its  personnel  embraces  James 
Burt,  chief,  representing  Havemyer  &  Elder,  Swift  &  Co.,  Butler  McDonald  &  Co.,  nud 
one  or  two  other  firms;  Special  Ag'ts  Tingle,  Tieheuor,  Hinds,  Supervising  Special  Ag't 
Martin,  Naval  Officer  Burt,  Deputy  Naval  Officer  Comstock,  and  Spec'l  Ag't  Ayer,  now 
on  duty  on  the  Pacific  coast,  on  the  one  hand,  and  Jas.  Dreyfoos,  representing  some 
eighteen  or  twenty  sugar-importing  firms,  Clerk  Rose,  and  a  few  other  minor  officers,  as 
aides,  on  the  other  side.    In  my  opinion,  this  is  the  personnel  of  the  "sugar  ring." 

For  a  long  time  Burt  and  Dreyfoos  were  at  war,  but  on  account  of  the  latter  knowing 
too  much  he  was  let  alone  to  work  his  way,  which  he  has  done.  Burt  pulls  his  men — 
employes  of  the  Government — by  his  political  and  personal  prestige,  backed  by  that  of 
his  brother  supported  by  the  special  agents. 

There  is  not  a  man  in  the  sugar  div.  but  who  either  owes  his  present  position,  his  ad- 
vancement in  office,  his  increase  in  salary,  and  his  retention  in  office  directly  to  the  in- 
fluence of  James  Burt,  and  not  one  of  these  men  would  dare  for  an  instant  to  do  any- 
thing contrary  to  his  desires. 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE, 


81 


Appr.  McMullen  owes  his  advancement  from  examiner  of  hardware  and  cutlery  to 
the  appraisership  directly  to  the  pleading  made  in  his  behalf  by  Naval  Officer  Burt, 
hacked  and  co-operated  in  by  Abraham  S.  Hewitt,  of  Cooper,  Hewitt  &  Co.,  hardware 
dealers. 

1  understand  it  was  represented  to  the  President  that  Mr.  McMullen  was  from  his  long 
years  of  training  as  examiner  eminently  fitted  for  the  position  of  appr.,  and  because  he 
was  known  to  be  a  Democrat,  serving  under  Republican  administration,  was  held 
back  when  he  deserved  advancement,  and  that  inasmuch  as  the  administration  had 
changed  it  was  nothing  more  than  right,  and  according  to  the  spirit  of  civil-service  re- 
form, that  he  should  be  advanced  to  the  appraisership. 

I  understand  that  he  acknowledges  his  present  position  to  Burt's  influence;  therefore 
he  is  quite  willing  to  do  Burt's  bidding  without  question;  of  course,  he  believes  that 
James  Burt  is  a  very  high-toned  gentleman. 

Of  the  men  Burt  uses  to  obtain  low  classifications  of  his  sugars  are  Abraham  Remsen, 
who  owes  all  he  is  from  his  first  position  to  his  present  position  to  James  Burt;  for  in 
1867  when  James  Burt  was  in  charge  of  the  7th  avenue  armory,  in  charge  of  quarter- 
master's supplies,  he  made  Abe  Remsen  asst.  storekeeper;  then  he  had  him  put  in  the 
U.  S.  service  in  1869  as  a  sampler,  when  he,  Burt,  went  in  as  asst.  app'r,  then  he  ad- 
vanced him.  And  Burt,  through  his  influence  with  Asst.  App'r  Hay,  has  kept  Remsen 
in  his  position  ever  since. 

It  was  a  notorious  fact  that  Asst.  App'r  Hay  was  Burt's  tool. 

Second.  Robt.  E.  Bowne  was  put  in  the  sugar  div.  March  4th,  1870,  as  an  opener  and 
packer,  and  was  advanced  to  supt.  of  samplers  through  Burt's  influence;  he  practically 
does  Burt's  bidding. 

Third.  W.  H.  Townsend  was  for  a  time  in  my  division  (damage),  but  Burt  had  him 
advanced  to  examiner  in  the  8th  div.  (May,  '83). 

Fourth.  During  all  the  time  that  Hay  was  asst.  appr.  he  was  Burt's  tool  absolutely, 
he  was  originally  put  into  his  position  by  him  and  kept  there.  At  one  time  he  was  at 
the  custom-house  under  Naval  Officer  Burt,  then  transferred  to  the  appr. 's  store  at  Jim 
Burt's  request. 

Fifth.  When  Mr.  McMullen  was  made  appr.  Burt  had  his  brother-in-law,  S.  C.  Guyon, 
made  examiner  of  hardware  in  his  (McMullen's)  place. 

Sixth.  Appr.  McMullen's  private  secretary  is  a  relative  of  James  Burt,  and,  of  course, 
does  Burt's  bidding,  as  Burt  is  his  patron,  and  Appr.  McMullen  firmly  believes  in  Bnrt. 

Seventh.  James  Dale  who  mixes  sugar  in  the  sugar-room  before  it  goes  to  the  laboratory 
is  another  tool  of  Burt's,  and  perhaps  he  is  responsible  for  more  crookedness  in  the  work 
of  testing  sugar  than  any  other  man,  for  through  his  manipulations  the  samples  can  be 
so  mixed  as  to  cause  a  test  to  go  up  or  down,  and  being  assisted  by  knowing  whose 
sugars  certain  serial  numbers  represent,  he  can  give  the  right  hint  to  the  chemist  in  the 
sugar  laboratory,  so  that  tests  can  be  made  favorable  to  importers. 

James  Dale  is  quite  a  wealthy  man;  he  has  most  of  the  sugar  samples  (the  residue  of 
the  sugar  samples)  to  sell  for  himself,  and  out  of  these  he  makes  a  snug  sum  yearly;  be- 
sides this  he  is  quite  a  money-lender,  loaning  money  to  the  employes  at  the  appr's 
store  at  usurious  rates  of  interest.  He  does  not  allow  it  to  appear  as  though  he  made  the 
loans,  but  invariably  says  he  can  get  the  money  for  the  borrower,  who  must  pay  for  the 
trouble  he  is  put  to  in  getting  the  loan  for  him. 

App'r  McMullen  must  be  knowing  to  this,  for  he  generally  sees  to  it  that  Dale's  dues 
are  paid  by  not  letting  the  men  who  borrow  get  their  money  before  they  square  accounts 
with  Dale.  Dale  has  been  making  for  years  as  much  as  $5, 000. 00  annually;  he  has  been 
buying  real  estate  in  the  annex  district,  but  most  of  it  is  in  his  wife's  name.  I  recently 
ran  across  several  of  his  real  estate  purchases  when  I  was  looking  up  some  deeds  in  that 
section  for  clients  of  mine. 

Eighth.  Edward  Sherer,  chief  chemist  in  the  U.  S.  laboratory,  is  clay  in  Mr.  Burt's 
hands  and  does  his  bidding;  the  same  could  be  said  of  nearly  everyone  else  in  the  labo- 
ratory; all  are  in  Mr.  Burt's  hands  and  dare  not  cross  him  for  they  know  too  well  his 
power. 

Ninth.  The  teamsters  who  drive  the  sample  wagons  are  in  Burt's  debt  for  retention  in 
office,  and  they  are  always  ready  to  do  him  favors. 

Tenth.  John  Sherer,  damage  examiner,  I  think  is  an  honest  man. 

Eleventh.  A  member  of  a  sugar-importing  house  not  long  ago  told  me  he  was  com- 
pelled to  pay  Burt  to  fix  his  classifiations  or  he  would  not  be  able  to  do  business  and 
keep  even  with  other  importers. 

Twelfth.  The  samplers  have  a  way  of  squirting  water  into  a  sample  whereby  the  classi- 
fication is  lowered. 

Thirteenth.  Broker  Dreyfoos  pulls  his  men  at  the  appraiser's  store  by  paying  them, 
while  Burt  uses  his  political  influence  over  them. 

I  will  guaranty  that  if  five  new  samplers  were  to  be  selected  every  one  would  owe 

S.  Ex.  123  6 


82 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


their  selection  to  James  Burt,  who  would  tell  Appr.  McMullen  just  which  he  should 
select. 

Theo.  Havemeyer,  of  the  firm  of  Havemeyer  &  Elder,  paid  |40,000  into  the  Republican 
campaign  fund  during  the  Blaine-Cleveland  campaign. 

James  Burt  was  outwardly  a  strong  Blaine  man,  while  his  brother,  the  naval  officer, 
was  working  for  Mr.  Cleveland,  so  that  in  any  event  the  "sugar  ring"  was  secure 
whichever  party  came  into  power.  You  can  read,  if  you  please,  this  piece  of  paper. 
"I  will  not  read  it  to  you." 

The  slip  of  paper  handed  me  (T.  A.  Byrne)  read  as  follows:  F.  Maher,  asst.  bk'keeper 
for  Havemyer  &  Elder,  residing  at  No.  143  Woodbine  st. ,  bet.  Centre  and  Evergreen  aves. , 

Brooklyn,  states  to  J.  P          "that  Naval  Officer  Bart  receives  $12,000  per  year  from 

Havemyer  &  Elder." 

You  can  look  this  matter  up  if  you  like,  but  it  would  take  clever  work,  I  can  assure 
you  of  that.    I  don't  say  that  this  is  true;  I  show  it  to  you  for  what  it  may  be  worth. 

Your  movements  are  known,  and  have  been  ever  since  you  were  at  work,  and  "the 
ring"  don't  fear  you  or  the  results  of  your  work. 

With  a  fearless,  honest  lawyer  in  Appraiser  McMullen's  place,  the  ring  and  existing 
combinations  in  various  trades  would  be  broken  up;  take,  for  instance,  silks,  gloves, 
drugs,  aniline  dyes,  linens,  and  hardware. 

I  have  evidence  and  affidavits  of  rascality  of  the  "sugar  ring,"  but  I  will  not  show  the 
affidavits  to  you,  for  I  am  satisfied  that  nothing  that  you  can  do  can  break  up  the  "ring" 
so  long  as  Appr.  McMullen  remains  in  office.  If  he  was  suspended  I  would  cOme  for- 
ward with  my  evidence:  till  then  I  am  dumb. 

The  sugar-damage  brokers  are  Jones  and  Kippin,  and  through  them  large  damaged 
allowances  are  secured.  The  allowance  of  5  per  cent,  commercial  damage  is  a  fraud. 
Steam  cargoes  of  sugar  have  no  damage  as  a  general  thing. 

Burt  don't  claim  damage  on  his  cargoes.  He  is  too  smart  for  that.  He  and  Broker 
Dreyfoos  are  on  good  terms  now. 

I  understand  New  York  has  swallowed  the  sugar-trade,  and  I  understand  Boston  mer- 
chants are  making  serious  objection;  about  time  they  did. 

See  me  again,  and  I  will  put  you  in  accord  with  certain  men  who  will  tell  you  of  facts. 

The  above  is  a  faithful  transcription  of  my  notes  made  of  his  conversation  and  state- 
ments. 

T.  Aubrey  Byrne, 
Special  Treasury  Officer. 


Exhibit  149. 

April  5th,  1887. 

John  A.  Lydecker,  broker,  Beaver  st.,  N.  Y.  City,  states  as  follows: 

I  was  for  three  years  special  deputy  collector  at  this  port.    I  have  had  considerable 
business  with  Naval  Officer  Burt. 

I  have  always  believed  in  the  integrity  of  the  naval  officer,  and  never  placed  any  cre- 
dence upon  current  rumors  against  him;  but  a  certain  transaction  occurred  which  very 
materially  altered  my  opinion.  I  will  frankly  state  that  my  statement  must  be  taken 
with  this  allowance,  that  I  have  a  prejudice  against  Naval  Officer  Burt  at  the  present 
time.    Our  differences  arose  subsequent  to  an  occurrence  which  I  will  narrate. 

Shortly  after  James  Burt,  his  brother,  the  then  asst.  appr.  of  the  sugar  div.  at  the 
appr's  store,  resigned,  James  Burt  came  to  my  office  at  the  custom-house  and  asked  me,  y 
as  special  deputy  collector,  to  allow  the  reliquidation  of  an  entry  of  a  certain  large  cargo 
of  sugar  which,  through  misapprehension,  he  had  classified  wrongly  as  one  of  the  last  of 
his  official  acts.  The  classification,  he  said,  had  been  made  at  too  high  a  rate.  I think 
the  importing  firm  in  question  was  Fabric  and  Chauncey.  James  Burt  said  to  me  that 
the  classification  was  too  high  by  considerable,  and  that  if  I  did  not  object  he  would 
have  a  re-liquidation  made,  intimating  that  the  naval  pffice  was  agreeable  to  the  re-liqui- 
dation. I  supposed  the  ten  days  allowed  by  regulation  had  not  elapsed  from  the  date  of 
the  liquidation,  and  gave  an  answer  equivalent  to  assent.  I  ordered  up  the  entry  and 
invoice  and  looked  over  them,  finding  to  my  surprise  that  more  than  thirty  days  had 
elapsed  from  the  date  of  the  liquidation,  consequently  I  did  not  send  the  papers  back  to 
the  appr. 

A  day  or  two  after  James  Burt  again  called  and  wanted  to  know  why  the  papers  had 
not  been  sent  to  the  appr.  I  told  him  of  the  date  and  the  time  that  had  elapsed,  and 
told  him  to  communicate  his  desires  to  the  Secy,  of  the  Treasury,  who  would,  if  the 
statement  of  facts  warranted,  order  a  re-liquidation.  He  demurred  and  urged  me  to 
allow  the  re-liquidation.  I  refused,  and  he  left  quite  incensed.  The  next  day  Col. 
Silas  Burt,  the  naval  officer,  came  to  me  and  said,  "You  did  not  oblige  James  in  the 


/ 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE.  83 

matter  of  re-liquidating  that  cargo  of  sugar."  I  said,  "No,"  explaining  my  reasons. 
He,  the  naval  officer,  then  took  it  upon  himself  to  argue  the  point,  showing  me  and 
stating  to  me  that  his  office  was  quite  willing  that  the  re-liquidation  should  be  made, 
as  that  evidently  a  great  mistake  had  occurred  in  the  classification,  whicu  would  entail 
quite  a  loss  to  the  importer. as  well  as  an  injustice,  and  that  James  had  made  a  great 
error  aud  he  wanted  to  have  it  set  right.  I  told  him  the  only  way  was  to  send  the 
matter  to  the  Secy,  of  the  Treasury.  He  was  quite  put  out,  and  for  a  long  time  showed 
it  in  his  manner  to  me. 

A  short  time  alter,  this  occurrence  above  narrated,  James  Burt  met  me  and  said,  41  You 
have  knocked  me  out  of  quite  a  little  money  by  not  allowing  that  entry  to  be  re-liqui- 
dated."   These  were  his  words  in  substance. 

I  do  think  the  naval  officer  supports  his  brother  James  in  all  his  work  as  sugar  broker 
at  the  appraiser's  store,  for  shortly  after  Broker  Burt  resigned  his  position  as  asst.  appr. 
he  obtained  the  brokerage  of  a  large  number  of  sugar-importing  houses  of  this  city, 
though  I  can  not  cite  you  any  particular  cases  to  prove  my  statement. 

That  there  is  truth  in  the  current  charge  of  manipulation  at  the  appraiser's  store  in 
the  passing  of  sugars  at  New  York,  and  that  James  Burt  controls  the  work  with  one  other 
man  named  Joe  Dreyfous,  is  borne  out  by  the  fact  that  Burt  controls  the  importation 
aud  classification  of  the  majority  of  the  sugars  imported  and  entered  at  this  port,  I  might 
almost  say  in  this  country.  That  the  bulk  of  sugars  should  come  to  New  York  andpay 
duty  here  tends  to  prove  that  lower  or  more  favorable  classification  can  be  obtained  at 
this  port  than  at  any  other  ports. 

Again  as  Burt  &  Dreyfous  are  both  ex-U.  S.  appraising  officers  and  they  control  this 
work,  the  conclusion  is  a  natural  one  aud  a  very  good  reason  exists  why  they,  the  sugar 
men,  should  have  these  men,  Burt  &  Dreyfous,  attend  to  their  appraisements. 

You  ask  me  how  could  the  naval  officer  assist  in  the  underclassification  of  sugar.  Well, 
it  would  be  only  necessary  for  one  or  two  liquidating  cler-ks  of  the  naval  office  to  suggest 
to  the  liquidating  clerks  at  the  custom-house  to  permit  changes  in  liquidation  to  be  made, 
for  the  importer  is  notified  of  the  results  which  are  obtained  before  the  final  liquidation 
is  made  on  the  entry;  thus  giving  them  opportunity  to  make  objection  through  their 
broker,  and  by  them  to  the  naval  officer. 

Suggestions  from  James  Burt  to  his  brother  would  without  doubt  be  considered  by  the 
latter. 

The  naval  office  is  supposed  to  be  a  check  upon  the  collector's  office.  I  can  not  point 
out  a  case  which  could  be  accepted  as  evidence  of  direct  connection  between  James  and 
Silas  Burt,  the  naval  officer,  which  would  prove  the  manipulation  of  sugar,  but  the  fact 
exists  in  my  mind,  and  I  might  truthfully  say  in  the  minds  of  those  who  are  engaged  in 
that  trade  in  this  city,  that  James  Burt  is  valuable  to  the  importers  and  refiners  must 
be  a  fact,  when  his  services  are  so  necessary  to  them,  and  these  services  are  mainly 
directed  to  the  appraiser's  store,  for  James  Burt  is  never  seen  on  the  wharves  or  at  the 
refineries  when  sugar  is  being  unladen;  his  work  is  done  at  the  appraiser's  store.  That 
sugar  is  satisfactorily  handled  by  these  men  is  noted  from  the  few  protests  and  appeals 
made.  The  whole  scheme  is  viewed  with  apparent  satisfaction  by  the  outside  sugar 
trade  (I  mean  the  trade  in  Boston  and  Phila. )  who,  noticing  the  great  advantage  New 
York  sugarmen  possess,  have  ordered  their  sugars  to  be  landed  and  pay  duty  at  New 
York. 

I  say  that,  taking  all  these  things  into  consideration,  in  the  absence  of  direct  evidence 
of  overt  acts  on  the  part  of  James  Burt  and  Joe  Dreyfous  and  the  silent  and  sub  rosa 
co-operation  of  the  naval  officer,  are  sufficient  to  the  minds  of  fair  men  to  show  that  the 
charges  currently  made  are  true. 

Another  thing  which  is  noteworthy  is  the  laxity  on  the  part  of  customs  officers  in 
handling  sugar  samples.  These  samples  go  out  of  the  care  of  Government  officers;  they 
are  laid  up  in  closets  within  easy  reach  of  the  refining  people.  Why  should  sugar  go  to 
the  refineries  wharves?  Weak  human  nature  at  two  or  three  dollars  a  day  succumbs 
and  eyes  are  closed  to  manipulations,  especially  when  a  little  thing  amounts  to  so  much 
in  saving  money  to  sugar  importers.  Let  the  sugar  go  to  the  Government  stores  as  other 
goods,  thus  the  Government  weigher  and  higher  officers  would  scrutinize  everything 
and  chances  for  fraud  would  be  lessened  by  the  presence  of  these  men.  A  larger  force  of 
inspectors  should  be  on  the  spot  and  not  leave  the  vessels  when  the  unloading  of  sugars 
is  taking  place  or  the  sampling  of  sugars.  Dreyfous  and  Burt  are  now  on  good  terms; 
at  one  time  they  had  a  quarrel  and  did  not  speak  to  each  other.  I  believe  this  quarrel 
has  been  forgotten. 

I  believe  App'r  McMullen  is  an  honest  man,  but  he  allows  Broker  Burt  to  hoodwink 
him  completely.  The  position  of  Burt's  brother  and  the  power  the  naval  officer  wields 
is  his  lever.  There  is  not  an  officer  at  the  port  but  who  wants  to  stand  high  with  Naral 
Officer  Burt,  and  by  doing  favors  for  James  Burt  they  are  assured  of  their  standing  with 
the  naval  officer." 

Mr.  Lydecker  was  unable  to  give  me  the  date  of  the  occurrence  referred  t«  when  the 


84 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


firm  of  Fabric  &  Chauncey  imported  the  sugar  in  question,  but  by  taking  the  date  of  the 
resignation  of  James  Burt  as  ass't  app'r  of  the  8th  div.  I  was  able,  by  a  long  and  care- 
ful search  of  the  records  of  1874,  to  find  the  importation  in  question;  the  facts  relating 
thereto  are  hereunto  annexed.    In  this  search  I  was  greatly  aided  by  Chief  Clerk  Prince 
statistical  div.  N.  Y.  custom-house.  « 
The  above  is  a  correct  transcription  of  my  notes. 

T.  Aubrey  Byrne,  * 

Special  Treasury  Officer. 


Exhibit  175. 

[N.  Y.  Cat.  No.  1118^. — Certificate  of  polariscopic  test  of  sugar.] 

Sugar  return,  showing  polariscopic  lest,  under  Department  Circular  No.  62,  May  22,  1883. 

TJ.  S.  Laboratory,  Appraiser's  Office, 

New  York,  June  24, 1885. 


Labora- 
tory No. 


A 
B 
C 
I> 
E 


1st  test. 


82 
82 

81.8 
82.3 
82 


2d  test. 


82.3 

82 

82 

82 

82 


3d  test. 


Test  for 
classifi- 
cation. 


82 

82 

81.8 

82 

82 


Labora- 
tory No. 


1st  test. 


2d  test. 


3d  test. 


Test  for 
classifi- 
cation. 


Approved : 

Edward  Sherer, 
Chemist  in  Charge. 


H.  J.  Abbott. 
W.  H.  Townsend. 


[N  .  Y.  Cat.  No.  ]118j. — Certificate  of  polariscopic  test  of  sugar.] 

Sugar  return,  showing  polariscope  test,  under  Department  Circular  No.  62,  May  22,  1883. 

TJ.  S.  Laboratory,  Appraiser's  Office, 

New  York,  June  22,  1885. 


Labora- 
tory No. 

1st  test. 

2nd  test. 

3d  t  est. 

Test  for 
classifi- 
cation. 

Labora- 
tory No. 

1st  test. 

2d  test. 

3d  test. 

Test  for 
classifi- 
cation. 

P  

96.9 
96.8 
96.8 
96.9 
96.9 
87.3 
88.0 
84.0 

96.9 
96.5 
96.6 
96.6 
96.8 
87.0 
88.3 
84.8 

96.9 
96.5 
96.6 
96.6 
96.8 
87.0 
88.0 
83.8 

W  

H  

Y  

Z  

294«J  

2'.)50  

2951  

Approved : 

Edward  Sherer, 

Chemist  in  Charge. 


Robert  Riqney. 
G.  Landsmann. 


FRAUDS  IN  NEW  YORK  CUSTOM  HOUSE.  85 
[N.  Y.  Cat.  1118  j. — Certificate  01  polariscopic  test  of  sugar.] 
Sugar  return,  showing  polariscopic  test,  under  Department  Circular  No.  62,  May  22,  1883. 


U.  S.  Laboratory,  Appraiser's  Office. 

N*w  York,  June  16th,  1885. 


 a — 

Labora- 
tory No. 

1st  test. 

2d  test. 

3d  test. 

Test  for 
classifi- 
cation. 

Labora- 
tory No. 

1st  test. 

2d  test. 

3d  test. 

Test  for 
classifi- 
cation. 

2597 

89.5 

89.8 

89.5 

X. 

85.8 

85.7 

85.' 

2598 

86 

85.9 

85.9 

2599 

91 

91.2 

91 

2600 

87.4 

87.7 

87.4 

2601 

86.8 

87 

86.8 

2602 

85.6 

85.8 

85.6 

2603 

86.3 

90 

86.5 

86.3 

2604 

87.7 

88.8 

87.7 

•  H.  J.  Abbott. 
Wm.  H.  Townsend. 

Approved: 

Edward  Sherer. 

Chemist  in  Cluxrge. 


[N.  Y.  Cat.  No.  1118£. — Certificate  of  polariscopic  test  of  sugar.] 
Sugar  return,  showing  polariscopic  test,  under  Department  circular  No.  62,  May  22,  1883. 


U.  S.  Laboratory,  Appraiser's  Office, 

New  York,  June  24,  1885. 


Labora- 
tory No. 

1st  test. 

2d  test. 

3d  test. 

Test  for 
classifi- 
cation. 

Labora- 
tory No. 

1st  test. 

2d  test. 

3d  test. 

Test  for 
classifi- 
cation. 

O  

84.6 

84.7 

84.6 

Edward  Sherer, 
H.  J.  Abbott. 

Approved: 


Chemist  in  Charge. 


[N.  Y.  Cat.  No.  III85. — Certificate  of  polariscopic  test  of  sugar.] 

Sugar  return,  showing  polariscope  test,  under  Department  Circular  No.  62,  May  22,  1883. 

U.  S.  Laboratory,  Appraiser's  Office, 

New  York,  June  19,  1885. 


Labora- 
tory No. 

1st  test. 

2d  test. 

3d  test. 

Test  for 
classifica- 
tion. 

Labora- 
tory No. 

1st  test. 

2d  test. 

3d  test. 

Test  for 
classifica- 
tion. 

2833 
2834 
2835 

A 

O 

86.5 

52.6 

45.4 

82 

85 

86.6 

82 
85.2 

86.5 

52.6 

45.4 

82 

85 

Robert  Rigney, 
G.  Landsmann. 

Approved : 

Edward  Sherer, 

Chemist  in  Charge.  . 


86  FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE 

[N.  Y.  Cat.  No.  1118j. — Certificate  of  polariscopic  test  of  sugar.] 

Sugar  return,  showing  polariscope  test,  under  Department  Circular  No.  62,  May  22,  1883. 

U.  S.  Laboratory.  Appraiser's  Office, 

New  York,  June  17,  1885. 


Labora- 
tory No. 

1st  test. 

2d  test. 

M.  W.  13 

75.7 

76 

2675 

88.6 

88.9 

2676 

87.3 

87 

2677 

80.8 

86.7 

2678 

89.6 

89.5 

2679 

89.6 

89.7 

2680 

88.7 

88.5 

2681 

88.9 

89.2 

2682 

88.9 

89.6 

2683 

89.4 

89.6 

3d  test. 


Test  for 
classifica- 
tion. 


75.70 
88.60 
87 

86.70 
89.50 
89.60 
88.50 
89. 20 
89.60 
89.40 


Labora- 
tory No. 


2684 
2685 
2689 
2690 
2691 
2696 
2697 
2698 
2699 


1st  test. 


88.4 

87 

82.8 

96 

84 

95.7 

87.9 

83.5 

85 


2d  test. 


88.7 

86.7 

83 

96 

84.3 

96 

87.8 
83.7 
85.2 


3d  test. 


Test  for 
classifica- 
tion. 


88.40 

86.70 

82.80 

96 

84 

95.70 
87.80 
83.50 
85 


G.  Landsmann. 
S.  F.  Ball. 


Approved : 

Edward  Sheeeb, 

Chemist  in  Charge. 


[N.  Y.  Cat.  No.  11 18£. — Re-test  certificate  of  polariscopic  test  of  sugar.] 

Sugar  return,  showing  polariscope  test,  under  Department  Circular  No.  62,  31ay  22,  1883. 

U.  S.  Laboratory,  Appraiser's  Office, 

New  York,  June  \lth,  1885. 


Labora- 
tory No. 

1st  test. 

2d  test. 

3d  test. 

2513 
2514 
2515 

Test  for 
classifi- 
cation. 


88.80 
90.00 
90.00 


Labora- 
tory No. 


1st  test. 

2d  test. 

3d  test. 

Test  for 
classifi- 
cation. 

G.  Landsmann. 
S.  F.  Ball. 


Approved : 

Edward  Sherer, 

Chemist  in  Charge. 


[N,  Y.  Cat.  No.  1118. — Certificate  of  polariscopic  test  of  sugar.] 

Sugar  return,  showing  polariscope  iest}  under  Department  Circular  No.  62,  May  22,  1883. 

U.  S.  Laboratory,  Appraiser's  Office, 

New  York,  June  1,  1887. 


Labora- 
tory No. 

1st  test. 

2d  test. 

3d  test. 

Verified. 
465 
464 
469 
471 
470 

96.2 

96.5 

95 

82.4 

96.6 

Test  for 
classifi- 
'  cation. 


96.2 

96.5 

95 

82.4 

96.6 


i  Labora- 
j  tory  No. 

1st  test. 

2d  test. 

3d  test. 

Test  for 
classifi- 
cation. 

Approved : 

Edward  Sherer, 

Chemist  in  Charge 


H.  J.  Abbott. 
Robert  Rigney. 
G.  Landsmann, 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE.  87 
[N.  Y.  Cat.  No.  11181- — Certificate  of  polariscopic  test  of  sugar.] 
Sugar  return,  showing  polariscope  test,  under  Department  Circular  No.  62,  May  22,  1883. 


U.  S.  Laboratory,  Appraiser's  Office, 

New  York,  June  25,  1885. 


* 

Labora- 
tory No. 

1st  test. 

2d  test. 

3d  test. 

Test  for 
classifi- 
cation. 

Labora- 
tory No. 

1st  test. 

2d  test. 

.  %  . 

3d  test. 

Test  for 
classifi- 
cation. 

B. 

84 

83.7 

83.7 

3060 

85.3 

85 

85 

3061 

85.8 

86 

85.8 

3062 

89.3 

89.5 

89.3 

H.  J.  Abbott. 
Wm.  H.  Townsenb. 

Approved : 

Edward  Sherer, 

Chemist  in  Charge. 


Exhibit  178. 

Port  op  New  York,  Appraiser's  Office, 
402  Washington  St.,  New  York,  July  21st,  1887. 

Mr.  Lewis  McMullen, 

Appraiser  of  the  Port,  New  York: 

Sir:  I  have  respectfully  to  ask  under  what  authority  of.  law  or  Department  regula- 
tion sugar  importers  or  their  brokers  are  entitled  to  demand  re-tests  of  their  sugars 
after  the  original  test  for  classification  has  been  made  in  the  absence  of  any  evidence  fur- 
nished by  them  showing  that  such  classification  was  erroneous,  and  why  said  requests  are 
complied  with? 

I  find  that  no  written  requests  for  re-tests  and  re-samples  of  sugars  from  sugar  brokers 
are  on  file  in  the  8th division  of  the  appraiser's  store  prior  to  March  1,  1885.  Will  you 
please  inform  me  if  written  requests  from  sugar  importers  and  their  brokers  were  re- 
quired or  made  previous  to  that  date,  and  if  so,  why  they  are  noton  file,  and  if  destroyed, 
by  whose  authority  ?  Please  furnish  copy  of  official  order  permitting  or  directing  their 
destruction. 

I  have  also  to  respectfully  request  that  you  will  inform  me  by  what  authority  of  law, 
when  in  the  classification  of  sugars  at  this  port  written  or  verbal  requests  are  made  by 
sugar  brokers  for  re- tests  and  re-samples,  and  particularly  in  cases  where  as  many  as  three 
and  four  tests  of  the  same  saiqple  of  sugar  have  been  made  and  where  the  original  or 
first  test  for  classification  was  the  lowest,  said  lowest  test  is  invariably  accepted  by  you  as 
the  test  for  classification  without  regard  to  the  results  ascertained  by  subsequent  tests  made  in 
conformity  with  said  written  or  verbal  requests  of  the  sugar  brokers,  and  which,  would 
advance  the  classification  for  duty,  if  considered  ? 
Very  respectfully, 

T.  Aubrey  Byrne, 
Special  Treasury  Officer. 


Exhibit  178  A. 

Port  of  New  York,  Appraiser's  Office, 

402  Washington  st.t  July  26th,  1887. 

Lewis  McMullen,  Esq., 

Appraiser: 

Sir:  Referring  to  a  letter  from  T.  Aubrey  Byrne,  Special  Treasury  Officer,  under  date 
of  the  21st  instant,  I  have  to  report  on  the  questions  propounded,  as  follows: 

1st  Question.  ' '  Under  what  authority  of  law  or  Department  regulations  sugar  import- 
ers or  their  brokers  are  entitled  to  demand  re- tests  of  their  sugars  after  the  original  test 
for  classification  has  been  made,  in  the  absence  of  any  evidence  furnished  by  them  show- 
ing that  such  classification  was  erroneous;  and  why  said  requests  are  complied  with?  " 

Ans.  Par.  33  (S.  S.  5725)  states  that  sugars  not  above  No.  13  Dutch  standard  in  color 
shall  be  selected  by  the  experts  in  the  examining  room  according  to  marks  and  from  origi- 

S.  Ex.  3  64 


88  FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 

nal  samples  of  each  mark,  thoroughly  mixed;  a  round,  tin  sample-box  full,  properly  num- 
bered, shall,  with  as  little  delay  as  possible,  be  transmitted  to  the  laboratory  for  polar- 
iscopic  test.  An  additional  sample,  prepared  in  the  same  manner,  shall  be  held  in  the 
examination  room  until  the  final  classification  is  determined.  The  additional  sample  (2d) 
called  for  in  the  above  paragraph  is  the  one  from  which  re-tests  are  always,  made.  This 
sample  is  intended  lor,  and  is  retained  for,  the  purpose  of  correcting  any  error  that 
might  possibly  occur  in  the  test  of  the  1st  sample.  The  experts  of  this  division  con- 
sider this  as  clearly  in  accordance  with  the  spirit  and  intent  of  the  aforesaid  paragraph. 

We  do  not  consider  the  final  classification  as  determined  until  the  return  is  made  on 
the  invoice  preparatory  to  its  being  forwarded  to  the  custom-house;  prior  to  this  action 
we  consider  it  our  duty  to  take  such  action,  if  requested  to  do  so,  as  will  verify  the  cor- 
rectness of  the  original  test;  if,  in  our  opinion,  the  test  of  the  original  sample  of  a  cargo 
of  sugar  shows  a  lower  test  than  the  sugar  warrants,  we  have  the  right  (and  often  exer- 
cise it)  to  test  the  retained  sample,  in  the  absence  of  any  request  from  the  importers  for 
such  action. 

Question  No.  2.  ' :  I  find  that  no  written  requests  for  re-tests  and  re-samples  of  sugars 
from  sugar  brokers  are  on  file  in  the  8th  division  of  the  appraiser's  office  prior  to  March 
1,  1885.  Will  you  please  inform  me  if  written  requests  from  sugar  importers  or  their 
brokers  were  required  or  made  previous  to  that  date,  and  if  so,  why  they  are  not  on  file, 
and  if  destroyed,  by  whose  authority?  Please  furnish  copy  of  official  order  permitting 
or  directing  their  destruction." 

Ans.  Requests  for  re- tests  and  re-samples  from  sugar  importers  and  their  brokers  have 
been  made  from  the  time  the  act  of  March  3d,  1883  (Sc  S.  5725),  went  into  operation. 
We  have  no  copy  of  official  order  permitting  or  directing  their  destruction.  Bequests 
for  re-tests  and  re-samples  were,  I  am  informed,  considered  by  Frank  Hay,  my  prede- 
cessor as  asst.  appraiser,  as  simply  memoranda,  and,  after  the  return  of  an  invoice  to  the 
custom-house  and  its  final  liquidation,  could  be  considered  as  waste  paper,  of  no  conse- 
quence whatever,  and  were  by  bis  instructions  treated  accordingly.  The  test-book  was 
considered  as  ample  and  sufficient  record,  containing,  as  it  does,  full  and  complete  account 
of  all  samples,  re-samples,  tests,  re-tests,  etc. 

Question  No.  3.  "I  have  also  to  respectfully  request  that  you  will  inform  me  by  what 
authority  of  law  when  in  the  classification  of  sugars  at  this  port  written  or  verbal  re- 
quests are  made  by  sugar  brokers  lor  re-tests  and  re-samples,  and  particularly  in  cases 
where  as  many  as  three  and  four  tests  of  the  same  sample  of  sugar  have  been  made,  and 
where  the  original  or  first  test  for  classification  was  lowest,  said  lowest  test  is  invariably 
accepted  by  you  as  the  test  for  classification  without  regard  to  the  results  ascertained  by 
subsequent  tests  made  in  couformity  with  said  written  or  verbal  requests  of  the  sugar 
brokers,  and  which  would  advance  the  classification  for  duty,  if  considered." 

Ans.  As  to  test  accepted  for  classification  I  desire  to  state  that  it  is  a  well-known 
and  scientific  fact  that  the  2d  or  retained  sample  will  on  account  of  the  drying  out 
(caused  by  evaporation  of  moisture)  test  higher  than  the  original  or  first  sample.  If 
the  test  of  the  1st  sample  is  correct,  long  experience  has  shown  that  the  2d  or  retained 
sample  will  always  show  a  somewhat  higher  test. 

It  will  be  an  act  of  injustice  to  hold  the  importers  to  the  increase  as  shown  in  the  test 
of  a  retained  sample,  especially  so  when  in  a  great  many  instances,  owing  to  the  great 
amount  of  work  on  hand,  several  days  intervene  before  a  re- test  can  be  procured.  1  f  the 
test  of  a  retained  sample  were  to  show  a  great  variance  between  that  and  the  original, 
the  officers  of  this  division  would  proceed  to  re-sample  the  entire  cargo  in  accordance 
with  (S.  S.  5858)  circulars  of  August  13,  1883.  If  on  a  re-sample  a  higher  polariscopic 
test  were  to  be  shown  than  the  original  the  importers  would  be  obliged  to  accept  the  lat- 
ter test  as  a  base  for  classification. 
Very  respectfully, 

Thomas  S.  Ticb, 
Asst.  Appraiser  8th  Division. 


Exhibit  178  B. 

New  Yoek,  July  27,  1887. 

Asst.  Appraiser  T.  S.  Tice  states  as  follows: 

This  letter  that  you  hand  me,  dated  July  20,  addressed  to  Appraiser  McMullen  by 
me  as  asst.  appr.,  and  by  that  officer  referred  to  Mr.  T.  Aubrey  Byrne,  special  Treasury 
officer,  is  in  answer  to  your  communication  of  the  21st  instant  addressed  to  him,  was 
not  compiled  by  me,  neither  did  I  make  any  suggestion  or  give  any  information 
whereby  it  was  made  up.  I  think  I  handed  your  letter  requesting  certain  information, 
dated  the  21st  inst.,  above  referred  to,  to  Examiner  Remsen,  but  it  might  have  been  to 
Clerk  Trainer.    Clerk  Trainer  wrote  out  theletter,  but  when  he  handed  it  to  me  I  asked 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


89 


Win  if  he  had  shown  it  to  Mr.  Remsen,  and  if  he,  Mr.  Remsen,  was  satisfied  as  to  ita 
(  orrejtness,  to  which  he  replied  that  he  was  perfectly  satisfied.  I  signed  the  letter  offi- 
cially as  prepared  by  Clerk  Trainer  and  Examiner  Remsen. 

Thomas  S.  Tice. 

Sworn  to  and  subscribed  before  me  this  27th  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 
Special  Treasury  Officer. 


Exhibit  178  0. 

New  York,  July  27,  1887. 

Examiner  Remsen  states  as  follows: 

The  letter  just  shown  me  addressed  to  the  appraiser  by  Ass't  Appraiser  Tice,  under 
date  of  July  26,  1887,  in  reference  to  the  law  or  authority  permitting  importers  and 
brokers  to  demand  re-tests  of  sugar  classifications,  etc.,  was  compiled  by  Clerk  Trainer, 
of  the  8th  division,  and  myself,  and  presented  to  Ass't  Appraiser  Tice  for  signature. 

A.  G.  Remsen, 

Ext.  8th  Div. 

Sworn  to  and  subscribed  before  me  this  27th  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 
Soecial  Treasury  Officer. 


Exhibit  178  D. 

New  York,  July  27,  1887. 

CHAS.  H.  Trainer,  sampler  and  acting  clerk,  8th  division,  states  as  follows: 

I  identify  the  letter  handed  me  by  yon,  which  is  addressed  to  the  appraiser  of  the 
port  by  Asst.  Appraiser  Tice,  under  date  of  the  26th  instant,  which  letter  was  composed 
by  Examiner  Remsen  and  myself  and  written  by  me,  and  is  a  reply  to  yoar  letter  of  the 
21st  instant  addressed  to  the  appraiser,  relative  to  the  law  or  authority  permitting  the 
granting  of  re-tests  on  demand  of  importers  and  their  brokers,  and  ether  matters  per- 
taining thereto,  said  letter  having  been  referred  by  the  appraiser  to  the  assistant  ap- 
praiser for  reply. 

Chas.  H.  Trainer. 

Sworn  to  and  subscribed  before  me  this  27th  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 
Special  Treasury  Officer. 


Exhibit  205. 

County,  City,  and  State  of  New  York,  ss: 

This  is  to  certify  that  I,  Charles  F.  Taylor,  of  New  York  City,  N.  Y.,  did  on  Decem- 
ber 13th,  1886,  receive  from  Mr.  T.  Aubrey  Byrne  three  (3)  samples  of  raw  sugar,  and  was 
requested  by  him  to  take  the  same  to  Messrs.  Sherer  Bros. ,  chemists,  122  Front  street, 
New  York  City,  and  to  obtain  ' i  close  tests ' '  by  polariscope  on  the  three  samples. 

On  the  same  day,  at  4. 30  p.  m. ,  I  went  to  the  laboratory  of  Messrs.  Sherer  Brothers, 
122  Front  street,  but  found  that  the  chemists  had  gone  for  the  day. 

At  9.40  a.  m.,  Dec.  14thr  '86,  I  again  called  at  Sherer  Bro.'s  laboratory,  and  asked 
the  young  man  who  waited  upon  me  to  have  Mr.  Sherer  make  close  tests  on  the  three 
samples  which  I  presented  to  him;  this  he  promised  should  be  done,  requesting  nie  to 
call  at  12  o'clock  the  same  day  for  the  results  of  the  tests;  he  remarked  that  this  was 
the  first  transaction  they  (Sherer  Bros. )  had  had  with  my  employers,  I  having  pre- 
viously informed  him  that  I  was  in  the  employ  of  \V.  H.  Power,  of  the  Produce  Ex- 
change." 

At  11.57  a.  m.  the  same  day  I  called  for  the  tests  and  received  the  "certificate  of 
polarization"  annexed  and  marked  "A,"  which,  when  presented  to  me,  was  printed  on 
the  bottom  "Sherer  Brothers."  I  then  paid  him  his  charge  for  the  work,  three  dollars 
($3),  and  asked  him  for  a  receipt,  which  he  gave,  annexed  and  marked  44 B."  He 
stamped  both  certificate  and  receipt  with  Sherer  Bros.'  office  stamp.  I  asked  him  lo 
sign  the  receipt  and  certificate,  at  first  he  objected,  but  after  a  little  pressing  he  signed 


90 


FRAUDS  IN   NEW  YORK  CUSTOM-HOUSE 


the  name  of  tl  Sherer  Bros."  to  both.  He  gave  me  to  understand  that  one  of  the  Sherers 
had  made  the  tests.    I  then  took  the  samples  of  sugar  and  left  the  place. 

On  or  about  December  27th,  1886,  I  again  called  at  the  laboratory  of  Sherer  Bros,  and 
ask  the  young  man  I  had  previously  met  there  who  had  made  the  tests  on  the  samples 
I  had  previously  brought  him.  He  recalled  the  circumstance,  and  said  he  would  look 
the  transaction  up  and  see  who  did  make  those  tests.  After  referring  to  his  books  he 
said  that  he  made  them,  as  "Mr.  Sherer  was  away  that  day."  I  said,  "  Your 'name  is 
Mr.  Kese,  is  it  not?"  He  answered,  "Yes."  I  said,  "I  asked  you  for  Mr.  Sherer's 
tests  on  those  samples,  as  there  was  to  be  arbitration  on  the  results. ' '  He  replied,  ' '  Mr. 
Sherer  is  only  here  in  the  mornings.    The  rest  of  the  day  he  is  out  appraising  cargoes. " 

On  January  5th,  1887,  I  called  again  at  Sherer  Bros.'  laboratory,  at  10.40  o'clock  a. 
m. ,  and  handed  to  the  same  man  I  had  met  there  before  two  (2)  samples  of  sugar,  request- 
ing that  Mr.  Sherer  personally  make  the  tests.  He  said  he  would  give  the  samples  to 
Mr.  Sherer  when  he  came  in,  which  would  "  be  about  noon  or  late  in  the  afternoon." 
I  said  I  would  call  about  4.30  p.  m. 

I  did  not  call  until  10  o'clock  the  next  day,  Jan.  6th,  and  I  asked  for  the  samples 
which  I  left  for  Mr.  Sherer  to  test.  He  said,  44  Mr.  Sherer  has  not  tested  these  samples, 
and  if  you  want  his  personal  test  you  must  take  them  to  the  U.  S.  laboratory,  Wash- 
ington street,  where  he  may  gife  you  his  personal  test,"  adding  that  "Sherer  has  no 
connection  with  this  place."  I  made  no  reply,  took  the  samples,  and  left,  for  he,  Keese, 
was  in  rather  a  flurried  state,  showing  evident  feeling  in  the  matter,  as  though  I  had 
doubted  his  word. 

I  forgot  to  state  that  during  my  call  at  Sherer  Bros.'  place,  on  December  27th,  '86,  I 
said  to  him  that  I  was  informed  that  the  usual  price  for  testing  was  75c.  for  each  sample. 
He  answered  that  75c.  per  sample  was  the  price  for  testing  a  large  quantity,  say,  from  25 
to  75  per  week;  for  instance,  such  quantities  as  they  received  from  Howells&  Co.  The 
reason  I  referred  to  the  price  was  because  he  had  charged  me  one  dollar  ($1 )  per  sam- 
ple, which  I  paid  with  money  given  me  by  Mr.  T.  Aubrey  Byrne  for  this  purpose. 

The  above  is  a  true  statement  of  the  facts  as  they  occurred;  in  testimony  of  which  I 
affix  my  hand  and  seal  this  twelfth  day  of  January,  A.  D.  1887.  . 

Chas.  F.  Taylor. 

Sworn  to  before  me  this  12th  day  of  January,  1887,  by  Chas.  F.  Taylor,  to  me  per- 
sonally known  and  known  to  me  to  be  the  same  person  who  executed  the  above  instru- 
ments. 

•      Theo.  C.  Kobre, 

Notary  Public. 

Witness  Dy  me  this  day,  Jan'y  12th,  1887. 

W.  D.  HOWDEN. 

Certf.  filed  in  N.  Y.  County. 


A. 


SUGAR  CERTIFICATE. 

[Sherer  Brothers,  analytical  chemists,  laboratory  for  sugar  analysis,  122  Front  street,  Rooms  16 

and  17.] 

New  York,  Dec.  14,  1886. 

Mr.  W.  H.  Power:  [T.  A.  B. 

We  hereby  certify  that  we  hare  examined  the  samples  of  "sugar"  marked  as  below, 
and  find  them  to  contain  as  follows: 

(27017) 


Marks. 


914  I'loilo,fr.  S.andM.. 
931      "       "  " 
309  Centrif.,  W.  and  H 


Cane 
sugar 
per  cent- 
age. 


80.4 
82.8 
96.5 


Sherer  &  Bros. 
Sherer  Brothers, 

Analytical  Chemists, 


F&AUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


91 


B. 

New  York,  Dec.  14th,  1886. 

[T.  A.  B.] 

Mr.  W.  H.  Power  to  Sherer  Bros. ,  Dr. 
[Analytical  and  consulting  chemists,  122  Front  street,  rooms  16  and  17.] 

For  3  Det  cane  sugar  •  3.00 

12,  14,  '86.  Paid. 

Sherer  Bros. 


Exhibit  211, 

B'KL'N,  Oct.  17,  '87. 

Mr.  T.  Aubury  Byrne: 

Dear  Sir:  The  following  are  the  answer  to  the  question  of  yours  of  Sep.  28, '87: 

1st.  Not  86  North  1st  street,  but  06  and  68  North  1st,  B'kl'n. 

2nd.  Sherrer  Bros,  leased  the  premises;  John  A.  and  Edward  Sherrer. 

3rd.  The  lease  was  made  out  for  one  year  to  the  first  of  May,  1885.  They  did  not  pay 
April  month  and  left  their  machinery  on  the  premises  until  the  first  of  June,  1885, 
when  the  mortgage  was  foreclosed  by  the  A.  C.  Keeney  estate. 

4th.  Sherrer  Bros,  commenced  to  pay  rent  June,  1884.  March,  1885,  was  the  last 
month  they  paid.  The  month  of  April  was  never  paid.  They  left  their  machinery  in 
the  premises  all  the  month  of  May,  consequently  holding  possession  all  the  months,  and 
on  the  1st,  or  after  the  mortgage  was  foreclosed. 

5th.  I  brought  a  suit  as  my  mother's  agent  for  ($150)  one  hundred  and  fifty  dollars, 
being  two  months'  rent,  for  the  months  of  April  and  May,  1885.  We  expected  to  collect 
for  these  two  months,  as  they  held  possession. 

6th.  I  had  all  the  dealings  with  Sherrers;  mostly  with  John  A.  Sherrer;  I  had  very 
little  to  do  with  Edward,  the  Turkish  consul. 

7th.  As  1  most  always  did  the  business  with  John  A.  Sherrer,  I  consequently  recog- 
nized him  as  the  principal;  I  don't  remember  of  Edward  Sherrer  having  paid  rent  to  me 
personally  or  otherwise. 

8th.  The  rent  was  paid  monthly  in  advance;  sometimes  by  John  A.  Sherrer,  and  at 
otfyer  times  it  was  sent  down  to  me  by  an  employe,  mostly  in  a  check  signed  Sherrer 
Bros.,  or  John  A.  and  Edward  Shener.  I  of  course  have  no  checks,  as  I  always  had  them 
turned  into  cash. 

9th.  The  Sherrer  Bros,  commenced  to  manufacture  about  June,  1884,  and  closed 
Mar.,  1885. 

10th.  I  saw  both  John  A.  and  Edward  about  the  premises  and  judged  they  both  gave 
orders  one  way  or  another  towards  the  manufacture  of  the  bronze  powder. 

John  A.  Sherrer  came  most  everyday;  Edward  did  not  come  so  often.  They  came  at 
different  times  of  the  day.  I  think  it  was  mostly  in  the  morning;  oftentimes  twice  a 
day. 

11th.  1  have  no  card  or  printed  matter  of  any  kind;  should  I  come  across  any  will 
send  it  to  you. 

12th.  I  have  seen  the  powder  taken  away,  or  I  supposed  it  was  such,  as  it  was  packed 
in  boxes.  I  don't  know  of  any  firm  whom  they  sold  it  to;  had  I  known  of  this  matter 
sooner  I  could  have  found  out.  Don't  know  what  kind  of  a  business  they  did,  but 
they  made  a  lot  of  powder. 

13th.  The  A.  C.  Keenev  estate  held  a  chattel  mortgage,  which  they  foreclosed  June, 
1885. 

14th.  The  bills  were  made  out  to  Sherrer  Bros. 

15th.  I  understood  Sherrer  Bros,  bought  out  the  Manhattan  Bronze  Powder  Co.,  and 
think  they  call  it  the  Atlantic  Bronze  Powder  Co. ;  am  not  sure. 
16th.  I  sued  John  A.  and  Edward  Sherer. 

17th.  John  A.  Sherer  makes  a  false  statement  when  he  says  he  paid  April  month,  and 
as  they  held  possession  of  the  premises  I  sued  for  the  two  months;  none  of  tin*  has  leeli 
paid. 

18th.  I  called  several  times  at  the  appraiser's  office  and  saw  both  John  A.  and  Edward 
in  different  offices.  I  considered  both  of  them  liable  lor  the  rent,  hen£  the  suit  ;  hut  as 
I  stated  before,  John  A .  Sherer  was  the  one  I  did  the  most  business  with. 


92 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


19th.  I  also  called  several  times  at  their  office  on  Front  street,  New  York.    The  rent 
of  these  premises  was  with  steam-power,  and  was  very  cheap,  considering  the  amount 
of  power  they  used,  and  was  a  serious  loss  to  my  mother,  she  being  a  widow,  and  it  was 
all  she  had  to  depend  upon  for  a  living  and  to  pay  her  interest,  taxes,  etc.,  with. 
Trusting  this  will  be  satisfactory,  I  am,  truly,  yours, 

Benj.  C.  Waite. 

P.  S. — Do  you  think  there  is  any  chance  of  getting  this  money  ?  Kindly  let  me  know. 
Yours,  &c, 

B.  C.  W. 


Exhibit  211J. 

Brooklyn,  N.  Y.,  Nov.  19,  1887. 

Mr.  T.  Aubrey  Byrne, 

Special  Treasury  Officer: 

Sir:  The  following  are  the  answers  to  the  questions  of  your  communication  of  Sep- 
tember 28th  last: 

First.  The  location  of  the  bronze  powder  factory  operated  by  the  Messrs.  Sherer  was  at 
66  and  68  North  First  street,  Brooklyn,  the  ground  lloor  being  occupied  by  me  for  my 
business. 

Second.  Sherer  Bros,  leased  the  premises,  viz,  John  A.  and  Edward  Sherer. 

Third.  The  lease  was  made  out  for  one  year  to  the  1st  of  May,  1885.  They  did  not 
pay  the  rent  for  April.  1885,  and  left  their  machinery  on  the  premises  until  the  1st  of 
June,  1885,  when  the  mortgage  was  foreclosed  by  the  A.  C.  Keeney  estate. 

Fourth.  Sherer  Bros,  began  paying  rent  in  June,  1884.  March,  1885,  was  the  last 
month's  rent  they  paid,  and  as  they  did  not  pay  the  rent  for  April,  and  left  their  ma- 
chinery on  the  premises  during  the  month  of  May  (thus  occupying  the  premises),  they 
were  indebted  for  two  months'  rent  up  to  the  time  the  mortgage  was  foreclosed. 

Fifth.  I  brought  suit  as  my  mother's  agent  lor  $150,  the  amount  of  rent  for  the  two 
months  mentioned. 

Sixth.  I  had  conducted  air  the  business  transactions  with  them  as  my  mother's  agent; 
mostly  with  John  A.  Sherer,  and  had  very  little  to  do  with  Edward  Sherer. 

Seventh.  As  I  most  always  transacted  all  business  with  John  A.  Sherer,  I  naturally 
recognized  him  as  the  principal.  I  do  not  remember  that  Edward  Sherer  ever  paid  me 
any  rent  personally  or  otherwise. 

Eighth.  The  rent  was  paid  monthly  in  advance,  sometimes  by  John  A.  Sherer,  and 
at  other  times  it  was  sent  downstairs  to  me  by  an  employe,  mostly  in  a  check  signed 
Sherer  Bros.,  or  John  A.  and  Edward  Sherer.  As  1  of  course  deposited  the  checks  I 
have  none  in  my  possession. 

Ninth.  Sherer  Bros,  commenced  manufacturing  about  June,  1884,  and  closed  March, 
1885. 

Tenth.  I  saw  both  the  Sherers  about  the  premises,  and  judged  from  observation  that 
they  both  had  direction  of  the  manufacture  of  the  bronze  powder. 

Eleventh.  John  A.  Sherer  was  at  the  factory  almost  every  day.  Edward  Sherer  did 
not  come  so  often.  They  came  at  different  times  of  the  day,  but  mostly  in  the  mornings 
and  sometimes  twice  a  day. 

Twelfth.  1  saw  the  powder  taken  away,  or  I  supposed  it  was  such,  as  it  was  packed 
in  boxe  ?.    Do  not  know  to  whom  they  sold  it,  but  they  shipped  considerable. 

Thirteenth.  The  A.  C.  Keeney  estate  held  a  chattel  mortgage  on  the  fixtures  and  ma- 
chinery. 

Fourteenth".  The  bills  for  rent  were  made  out  to  Sherer  Bros. 

Fifteenth.  I  understood  that  Sherer  Bros,  bought  out  the  Manhattan  Bronze  Powder 
Co.,  and  think  they  called  it  the  Atlantic  Bronze  Powder  Co.,  but  am  not  certain. 
Sixteenth.  I  entered  suit  against  John  A.  and  Edward  Sherer. 

Seventeenth.  John  A.  Sherer  makes  a  false  statement  when  he  says  he  paid  April  rent. 

Eighteenth.  I  called  several  times  at  the  appraiser's  office,  and  saw  both  John  A.  and 
Edward  Sherer  in  different  offices.  I  considered  both  of  them  liable  for  the  rent,  hence 
the  suit  against  both,  but  as  stated  before.  1  did  most  of  the  business  with  John  A. 
Sherer. 

Nineteenth.  I  also  called  several  times  at  the  office  of  Sherer  Bros.,  No.  122  Front 
St.,  New  York,  while  endeavoring  to  collect  this  rent. 

Twentieth.  The  rent  of  the  premises  was  with  steam  power  and  was  very  cheap,  con- 
sidering the  amount  of  power  used,  and  was  a  serious  loss  to  my  mother,  she  being  a 


FRAUDS  IN  NEW   YORK  CUSTOM-HOUSE. 


.93 


Widow,  and  who  is  entirely  dependent  upon  this  income  for  her  living,  and  also  out  of 
which  she  has  interest,  taxes,  and  insurance  to  pay. 

Benj.  C.  Waitk. 

Sworn  and  subscribed  to  before  me  this  nineteenth  day  of  November,  A.  D.  1887. 

Leon  Hirsh, 
Notary  Public,  Kings  Co.,  N.  Y. 

The  erasure  and  interpolation  in  question  fourth,  fifth  line,  were  made  before  sign- 
ing. 

L.  Hiksh, 
Notary  Public. 

[In  original  copy  the  words  "  for  which,"  after  the  words  "  two  month's  rent,"  were 
erased  and  "up  to  the  time"  substituted. — Printer.  ] 


Statement  000. 

New  York,  July  29,  1887. 

Examiners  McElwee,  Foskett,  and  Samplers  Freeborn  and  Flocken,  having 
been  detailed  by  Asst.  Appraiser  Tice,  at  the  request  of  Special  Treasury  Officer  Byrne, 
to  take  samples  from  certain  so-called  damage  mats  of  Iloilo  sugar,  upon  which  appli- 
cation for  damage  had  been  made  (see  copy  of  same  annexed),  states  as  follows: 

Upon  proceeding  to  Woodruff's  stores,  Brooklyn,  where  the  cargo  of  the  barque  Josie 
Troop  had  been  unloaded  and  stored,  we  made  inquiry  of  the  storekeeper  (Roberts)  as 
to  the  whereabouts  of  the  alleged  damage  package  of  said  cargo  and  their  number. 
He  informed  us  they  were  in  stores  L  and  P  and  numbered  3,350  mats,  the  damage 
being  claimed  on  3,500  mats  or  bags.    (See  copy  of  damage  application.) 

On  proceeding  to  said  stores,  accompanied  by  the  said  Government  store-keeper  above 
alluded  to,  he  designated  three  separate  piles,  which  had  been  laid  out  as  damaged 
sugar,  but  not  stencilled  as  such:  by  careful  estimate  of  the  three  piles  they  aggre- 
gated in  our  judgment  about  1,500  mats. 

In  accordance  with  instructions  of  Special  Treasury  Officer  Byrne,  we  proceeded  to 
sample  all  mats  or  bags  in  these  three  piles,  which  showed  also  traces  of  previous  sam- 
pling or  cutting.    The  samples  taken  by  us  are  herewith  submitted. 

We  found  that  only  19  mats  of  these  three  pile^  gave  any  evidence  of  being  previously 
sampled  or  cut,  and  these  19  mats  were  confined  exclusively  to  the  two  piles  in  store  L. 
The  mats,  19  in  number,  as  mentioned,  were  identified  by  the  Government  store-keeper 
as  those  which  had  been  sampled  by  Damage  Examiner  John  Sherer  previously.  These 
samples  had  been  drawn  from  the  ends  or  "ears"  of  the  mats,  while  the  regulations 
require  that  all  samples  of  sugars  shall  be  drawn  from  the  centre  of  the  package  as  per 
paragraph  18. 

In  this  connection  we  would  state  that  all  samples  of  sugars  drawn  from  bags  or  mats 
at  the  ends  or  ears,  as  above  stated,  must  necessarily  be  of  a  lower  grade  than  that  which 
is  drawn  from  the  center  of  the  package.  We  also  consider  that  the  requirements  in 
paragraph  44,  as  to  "  care  being  exercised  that  the  samples  so  taken  fairly  represented 
the  proportion  and  degree  of  damage  each  grade  in  the  different  classes,"  in  this  instance 
has  been  ignored,  for  the  reason  that  19  mats,  in  our  estimation,  is  in  no  sense  a  proper 
representation  of  the  3,350  mats  upon  which  damage  is  claimed;  neither  do  we  consider 
it  a  fair  estimation  of  the  1,500  mats  of  damaged  packages  as  shown  us  by  the  store- 
keeper. The  dock  man  who  stored  them  away  also  pointed  out  these  1,500  mats  to  us 
as  those  which  had  been  laid  out  from  this  cargo  as  damaged.  We  all,  with  the  excep- 
tion of  Sampler  Flocken,  saw  marks  "A,"  "B,"  and  "C  "  in  the  damaged  piles,  which 
is  clearly  in  violation  of  paragraphs  13  and  14. 

We  proceeded  to  draw  what  in  our  estimation  was  a  fair  representation  of  1,500  bags 
(so-called  damaged  bags),  namely:  5  per  cent,  being  75  samples.  In  fact  we  drew  85 
samples,  taking  them  promiscuously  from  the  three  piles,  and  these  are  the  samples 
which  we  hand  you,  which  were  sealed  up  by  us  last  night  and  are  intact  this  morning. 
These  samples  were  drawn  between  4.30  and  6.30  p.  m.  of  yesterday,  July  28th.  The 
larger  proportion  of  these  1,500  alleged  damage  mats  were  not,  in  our  opinion,  deserving 
of  any  consideration  as  being  damaged.  Examiners  Foskett  and  McElwee  herein  sepa- 
rately state  that  upon  careful  examination  they  fail  to  find  any  damaged  packages  in  the 
pile  of  store  P,  estimated  to  number  700  mats. 

Before  closing  this  statement  we  would  state  in  addition  that  from  the  19  damaged 
mats,  from  which  samples  had  been  drawn  by  Damage  Examiner  Sherer  as  stated,  we 
drew  a  sample  from  each  one  from  as  nearly  the  center  as  possible.  Those  samples  we 
hand  you,  marked  "A,"  No.  710.    From  the  5  per  cent,  of  the  1,500  mats  of  the  alleged 


94 


FRAUDS  IN  NEW  YORK  CUSTOM  HOUSE. 


damaged  sugar  t  aken  promiscuously  from  the  three  piles  we  drew  85  samples.  These 
we  hand  you,  marked  "B,"  No.  711. 

It  is  our  opinion  that  the  19  sample  mats  represented  by  sample  marked  4\A"  were 
the  worst  packages  of  the  alleged  3,500  upon  which  damage  is  claimed,  and  these  are 
damaged  but  very  slightly.  All  the  balance  of  the  alleged  damaged  mats,  represented 
by  sample  marked  "B,"  does  not  show  sugar  upon  which  the  importer  is  entitled  to 
damage. 

Forthe  information  of  the  hon.  Secretary  of  the  Treasury  we  respectfully  submit  the 
following : 

First.  As  per  importer's  application  for  damage  allowance  on  3,500  bags,  we  are  in- 
formed by  the  storekeeper  that  there  was  only  3^350  bags. 

Second.  We  find  upon  examination  there  are  only  about  1,500  bags. 

TJiird.  That  marks  A,  B,  and  C  were  promiscuously  scattered  in  the  alleged  damage 
piles. 

Fourth.  We  found  that  but  19  bags  had  been  sampled  by  the  damage  examiner  as  far 
as  we  could  see,  and  these  samples  irregularly  drawn  from  the  ends  of  the  package. 

Fifth.  None  of  these  alleged  damage  packages  had  been  stencilled  "Damaged." 

Sixth.  We  were  informed  by  the  U.  S.  storekeeper  that  these  alleged  damaged  pack- 
ages had  not  been  disturbed  since  the  damage  examiner  had  drawn  his  samples. 

Seventh.  This  being  the  fact,  the  samples,  as  drawn  by  the  damage  examiner,  could 
not  properly  have  been  done. 

This  statement  has  been  made  in  reply  to  interrogatories  propounded  by  Special  Treas- 
ury Officer  Byrne. 

We  will  further  add,  that  from  our  experience  and  knowledge  of  the  labor  and  diffi- 
culties surrounding  and  attending  the  sampling  of  sugars,  that  it  would  be  to  the  best 
interests  of  the  revenue  in  every  particular  that  the  sampling  of  damaged  sugars  should 
come  under  the  jurisdiction  of  the  asst.  appraiser  of  the  8th  division  and  be  always 
performed  by  his  officers;  and  that  every  package  of  sugar  upon  which  damage  is  claimed 
should  be  sampled.  With  this  exception,  the  sampling' regulations  which  apply  to  the 
sampling  of  sound  sugars  should  apply  to  damaged  sugars. 

We  are  further  strongly  of  the  opinion  that  any  application  for  damage  on  sugars 
should  be  made  by  the  importer  or  his  representative  within  24  hours  after  the  comple- 
tion of  the  weighing  of  the  cargo. 

Jno.  Stuart  McElwee,  Examiner. 
Byron  D.  C.  Fosket,  Examiner. 
A.  B.  Freeborn,  Sampler. 
N.  Flocken,  Sampler. 

Sworn  and  subscribed  to  before  me  this  29th  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 

Special  Treasury  Officer. 


Exhibit  DD. 

New  York,  July  14,  1887. 

Samuel  F.  Ball,  sampler,  detailed  as  examiner,  states  as  follows: 

My  duties  are  confined  to  the  polarization  and  testing  of  sugars.  On  June  10,  '85,  or 
thereabouts,  I  was  appointed  asopener  and  packer,  and  Oct.  13  was  made  a  sampler.  I  was 
detailed  when  first  appointed  to  the  laboratory,  and  have  been  employed  there  ever  since, 
and  have  acted  in  the  capacity  of  an  examiner  ever  since  my  first  appointment.  I  am 
not  allowed  to  officially  sign  the  laboratory  certificates  of  tests  made  by  me  from  the 
fact,  as  I  presume,  that  I  am  not  officially  an  examiner.  Theodore  G.  Moore,  an  ex- 
aminer, also  reads  the  polariscope  and  signs  the  certificates  of  tests  made  by  him. 

I  first  commenced  to  test  sugars  in  the  laboratory  of  Sherer  Bros.,  chemists,  122  Front 
st.,  this  city,  about  1882  or  1883,  and  remained  with  them  in  their  employ  for  about 
two  years,  when  I  went  to  the  Brooklyu  Sugar  Refinery  as  chemist. 

I  am  23  years  of  age.  While  in  the  employ  of  Sherer  Bros. I  acquired  the  practical 
knowledge  of  testing  sugars,  being  instructed  particularly  and  altogether  by  Mr.  W.  J. 
Rigney,  chemist  at  the  Messrs.  Sherer  Bros.  I  understood  I  was  working  for  the  firm 
of  Sherer  Brothers,  and  although  I  was  in  the  employ  of  the  said  firm  two  years  or 
thereabouts,  I  am  unable  to  state  whether  Mr.  Rigney  was  a  member  of  the  firm  or  an 
employe,  although  I  was  under  his  direction.  I  did  not  receive  instruction  of  any  kind, 
either  from  Dr.  Edward  Sherer  or  Mr.  John  Sherer,  while  I  was  in  the  employ  of  said 
Sherer  Bros.  I  have  never  seen  Dr.  Edward  Sherer  in  the  office  of  Sherer  Bros.,  at  122 
Front  st.,  while  I  was  in  their  employ.  He  might  have  come  in  the  place  when  I  was 
out.  I  have  seen  Mr.  John  Sherer  there  occasionally.  I  believe  he  had  damage  samples 
which  he  brought  to  the  laboratory  of  the  firm  in  question  and  tested  them  there.  I 
have  assisted  him  in  these  tests. 


FRAUDS  IN  NEW  YORK  CUSTOM-HOUSE. 


95 


I  did  not  read  the  polariscope  on  Mr.  Jno.  Sherer's  test  of  damage  samples,  but  I 
mixed  the  samples  and  assisted  generally.  He  might  appear  at  the  laboratory  there  at 
any  time  of  the  day  with  the  samples  of  damaged  sugars.  When  we  were  crowded  on 
work  at  Sherer  Bros,  's  laboratory  we  tested  sugars  at  night.  I  can  not  swear  that  he  has 
not  tested  damaged  sugars  at  night.  The  office  immediately  adjoining  the  sugar  labora- 
tory of  Sherer  Bros.,  at  122  Front  street,  is  the  office  if  the  Turkish  consul,  and  Dr.  Ed- 
ward Sherer  is  the  Turkish  consul,  and  there  is  a  door  connecting  the  office  of  the  labora- 
tory with  that  of  the  consulate,  and  as  a  matter  of  fact  that  door  remains  open  unless 
there  are  visitors  in  the  consulate,  and  it  does  not  follow  that  the  door  would  be  closed 
when  the  visitors  were  there. 

I  have  never  seen  the  Turkish  consul  in  his  office  at  any  time.  There  was  a  bell  attached 
to  the  outside  door  of  the  consulate,  which  we  could  always  hear  if  any  one  entered  the 
consul's  office.  If  I  were  testing  sugars  at  the  polariscope  no  one  could  get  into  the 
consul's  office  unobserved  by  me,  generally  speaking.  If  my  back  was  turned  to  the 
-consul's  room  then  the  bell  would  be  the  only  indication  of  any  entrance  to  the  consul's 
room.  I  have  done  work  in  the  consular  office,  stamping  clearance  papers,  etc.,  for  the 
Turkish  consul. 

To  the  best  of  my  knowledge  and  belief,  Dr.  Edward  Sherer  was  at  that  time,  and  is 
at  the  present,  the  Turkish  consul  at  the  port  of  New  York,  although  I  do  not  wish  to 
make  affidavit  to  that  effect. 

I  have  heard  people  call  at  the  office  and  ask  for  the  Turkish  consul  and  presumed 
they  meant  Dr.  Sherer,  and  referred  them  to  Mr.  W.  J.  Rigney,  as  Dr.  Sherer  did  not  visit 
the  consulate,  and  I  have  never  seen  him  in  Sherer  Bros. '  laboratory. 

For  a  time  there  was  a  man  named  Keyes  also  employed  in  Sherer  Bros. '  laboratory, 
who  was  a  relative  of  the  Sherers.  I  will  not  state  positively  that  I  have  not  been  in 
Sherer  Bros.'  laboratory  during  the  past  twelve  months.  About  January  15th,  last,  I 
was  in  their  laboratory  and  saw  Burton  Keyes  there,  the  aforementioned  relative,  and  a 
boy.  Mr.  Burton  Keyes,  I  think,  succeeded  Mr.  Rigney  in  the  laboratory  of  Sherer 
Bros.  I  do  not,  and  never  did  know  who  constitute  the  firm  of  Sherer  Bros.,  "analyt- 
ical and  consulting  chemists."  The  analytical  business  of  the  firm  in  question  while  I 
was  with  them  was  principally  the  testing  of  sugars.  I  think  I  heard  Mr.  Rigney  speak 
of  the  bronze  powder  that  Dr.  Sherer  made.  I  never  knew  that  Dr.  Sherer  was  engaged 
in  the  manufacturer  of  bronze  powder.  I  generally  use  Dr.  Sherer's  polariscope  when  I 
test  sugars. 

We  have  no  other  quartz-plates  in  the  laboratory,  to  my  knowledge,  other  than  one 
marked  96  and  one  marked  99.1.  Another  plate,  however,  marked  99.1-2,  is,  I  be- 
lieve, in  Boston,  but  I  do  not  know  that  it  came  from  this  laboratory.  I  can  not  tell 
which  of  the  two  quartz  plates,  96  or  99. 1,  is  the  standard,  as  I  use  either.  I  have  heard 
it  stated  that  the  99. 1-2  plate  is  marked  correctly,  so  Dr.  Sherer  has  informed  me.  Mr. 
Rigney  and  I  have  been  working  together  for  the  last  ten  days,  and  in  that  time  we 
have  made  about  five  re- tests.  If  I  were  testing  sugar  for  refineries,  as  I  have  in  the 
past,  and  found  a  variance  of  two-tenths  (T2ff)  in  the  reading  of  the  same  solution,  I 
would  make  a  third  reading.  This  is  not  done  in  the  U.  S.  laboratory.  If  the  reading 
in  the  laboratory  is  95.9  and  96.1,  the  tubes  are  re-read,  because  they  are  not  in  the 
same  classification.  In  explanation,  if  the  second  reading  was  maintained,  both  tubes 
reading  96.1,  then  the  duty  would  be  assessed  at  97.  If  I  read  the  sugar  96.5  and  the 
second  reading  is  96.4,  then  there  would  be  no  question  in  my  mind  as  to  the  value  of 
the  difference  of  one-tenth,  because  it' makes  no  difference  in  the  classification  for  duty. 
When  one-tenth  of  a  degree  will  throw  the  classification  for  duty  up  one  full  degree, 
viz,  t£q  cents  per  pound,  and  it  is  y1^  I  let  it  stand  as  one-tenth,  although  it  throws  the 
duty  ui)  one  full  degree.  The  way  I  give  the  merchant  the  benefit  of  the  doubt  is,  if  a 
question  arises  in  my  mind  whether  a  sugar  polarizes  for  instance  95  or  95.1,  I  will  set 
the  test  for  classification  at  95. 

I  decline  to  answer  as  to  whether  Mr.  Jas.  S.  Dale,  an  employe  of  the  sugar  room  of 
the  appraiser's  store,  loans  money  to  other  employes  in  the  building,  because  I  consider 
it  an  improper  question.  I  also  decline  to  answer  whether  or  not  I  have  borrowed  money 
from  Mr.  Dale.  I  also  decline  to  state  whether  I  have  heard  any  of  the  employes  state 
that  they  had  borrowed  money  of  him. 

I  subscribe  to  the  oath  for  my  month's  pay  before  the  end  of  the  month  and  before 
the  services  have  been  performed  by  me.    I  understand  this  to  be  the  custom  here. 

I  have  never  seen  Sugar-Broker  Burt  in  the  laboratory.  I  have  private  reasons,  which 
I  do  not  propose  to  state,  for  saying  that  I  am  under  no  obligations,  directly  or  indirectly, 
to  Sugar-Broker  Burt. 

I  know  Mr.  Theo.  G.  Morse,  an  examiner  in  the  laboratory,  and  consider  him  capable 
of  polarizing  sugar.    He  signs  certificates  of  tests. 

S.  F.  Ball. 

Sworn  to  and  subscribed  before  me  this  14th  day  of  July,  A.  D.  1887. 

T.  Aubrey  Byrne, 
Special  Treasury  Officer* 


96 


FRAUDS  IN  NEW  YORK  CUSTOM-tiOUSE. 

N.  Y.,  July  15,  1887. 


Samuel  F.  Ball.    Further  examination: 

I  have  had  no  conversation  with  any  one  in  the  laboratory  relative  to  my  or  their  ex- 
amination on  the  sugar  investigation  since  my  first  being  sworn. 

S.  F.  Ball. 

Sworn  and  subscribed  before  me  this  15th  day  of  July,  1887. 

T.  Aubrey  Byrne, 

Spl.  Treaty  Officer. 


Diagram  made  of  Sherer  Bros.9  laboratory  and  Turkish  consul1  s  office,  made  by  Sam1 1  F.  Ball, 

July  14,  1887. 


Consulate. 


Hall. 


O 


Laboratory. 


|   | = Doors. 


